A new £25 million Water Efficiency Lab (‘WEL 1’) is being launched to support innovations that help people and businesses better understand and reduce their water consumption.

Part of Ofwat’s £100 million Water Efficiency Fund, the lab will provide £5 million in funding during its first year, inviting innovators to develop data-driven solutions that turn water usage insights into practical action.

Demand for water is already at record levels, and projections suggest England could face a shortfall of 5 billion litres per day by 2055 due to population growth, climate change, and rising demand. Yet research shows 94% of people underestimate how much water they use, with many believing they use less than 20 litres per day, compared with an average of 152 litres.

The first year of the competition will focus on closing this knowledge gap, encouraging solutions that provide customers with clear insights into their water usage and ways to reduce it. Potential areas of innovation include:

  • Smart customer platforms that provide real-time behavioural nudges and incentives;

  • Fixture-level monitoring systems that track the usage of specific appliances; and

  • Leak detection 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.

Water Minister Emma Hardy comments:  “This year’s prolonged dry weather demonstrates why we all need to take action to protect our water resources, as with a changing climate it is likely we will see pressure on the system continue to grow.

“Saving water benefits everyone, reducing bills whilst leaving more water in the environment. While water companies must go further and faster to fix leaks, this Government is taking decisive action, including developing nine new reservoirs to help secure long-term water resilience.”  

Chris Walters, interim chief executive of Ofwat: “Most consumers and businesses want to use water responsibly but currently lack the information to do so. The Water Efficiency Lab will help turn data into insights and action, supporting long-term sustainability.”

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 Tuesday 25th November and remain open until 10th 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.

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 will be published at launch at waterinnovation.challenges.org.