Ofwat has launched a £25m Water Efficiency Lab, a challenge-led competition to fund innovations in cutting water use..

It says demand for water is at an all-time high, yet people lack the insights and tools to track and cut their usage – as a result 94% of people underestimate their daily consumption.

With £5m available in its first year, the Water Efficiency Lab will task innovators with developing data-driven solutions that solve this challenge and provide clear, actionable insights to customers to reduce their water usage.

Part of Ofwat’s £100m Water Efficiency Fund, the Water Efficiency Lab is designed to help build a more resilient and sustainable water system across England and Wales.

The first year of the competition will offer funding up to £1.5m for individual projects.

England faces a projected five billion-litre-per-day shortfall in public water supplies by 2055, driven in part by population growth, climate change and increasing demand. Ofwat says reducing use is critical to maintaining resilient and sustainable water infrastructure.

The first year of the competition, WEL 1, will look to fund a range of innovations, with solutions in potential areas including:

• Customer-facing smart data platforms that provide real-time behavioural nudges and incentives
• Fixture-level monitoring systems that track the usage of specific appliances
• Combined leak detection and consumption systems that provide behavioural feedback

Entries that provide alternative approaches for properties which are unable to have a water meter fitted, are hard to meter and properties that are a low priority to be metered will also be welcome – ensuring solutions are inclusive and widely applicable, making water efficiency possible for everyone.

While the water sector continues to work to reduce leaks and invest in infrastructure, ensuring these companies support their customers to understand and act on their usage is essential. The Water Efficiency Lab has been created to drive that change – facilitating innovations and breakthroughs that water companies can embed into their services to help customers to cut their overall water use.

Chris Walters, interim chief executive of Ofwat, said: “Consumers and businesses want to use water responsibly and reduce its use where possible, but right now most don’t have the information they need to understand how much they use or where they can save. The Water Efficiency Lab has been created to overcome this and turn data into positive insights and action.

“Small changes across millions of people and businesses can make a big difference – helping cut usage now, while protecting the environment, reduces the risk of shortages and creates a more resilient and sustainable water system for the future.”

The Water Efficiency Lab’s first competition is open to all UK-based innovators, and international innovators, that partner with a UK-based lead entrant, from any sector including but not limited to water companies (wholesalers and retailers), tech developers, universities, behavioural science specialists and start-ups. Entries will be assessed on their potential impact to deliver water consumption reduction, innovation, feasibility and pathway to adoption and implementation across England and Wales.

The competition will formally open to entrants at 1pm on 25 November and remain open until 10 March 2026. Winners will be announced in June 2026, with funding awarded to the most promising projects that help accelerate adoption, behavioural change and measurable reductions in demand.

Click here for more information about the Water Efficiency Lab and the first competition, including the entry form, assessment criteria, terms and conditions and the support available to entrants which will be published at launch.