More of the technologies being installed to make Welsh homes cheaper and greener to run could be manufactured in South West Wales under a new £7 million investment programme.
Businesses are being offered grants of between £100,000 and £1 million to establish, expand or diversify manufacturing operations producing technologies including heat pumps, solar panels, battery storage and intelligent energy systems.
The Supply Chain Fund forms part of the Swansea Bay City Deal's Homes as Power Stations (HAPS) project and is intended to capture more of the economic benefits generated by the transition towards lower-carbon homes within the region.
While demand for domestic renewable and energy-efficiency technology is growing, many of the products and components required are currently manufactured outside South West Wales and, in some cases, overseas.
The new fund is designed to address that gap by encouraging businesses to develop manufacturing capacity closer to the homes where the technology will ultimately be deployed.
As well as heat pumps, solar photovoltaic systems and domestic battery storage, investment can support businesses involved in power walls, infrared heating, intelligent energy systems and other innovative renewable technologies.
The programme is open to start-ups entering the market, established smaller businesses seeking to increase production and larger companies looking to diversify into home-energy technologies.
The wider ambition is to develop a stronger regional supply chain capable of supporting skilled employment while giving South West Wales greater capacity to respond to growing demand for low-carbon technologies.
Councillor Jeremy Hurley, Cabinet Member for Climate Change and Economic Growth, said:
“By supporting the development of a local supply chain for renewable technologies, we can create skilled jobs, attract investment and ensure the region has the expertise needed to deliver more energy-efficient homes.
“The fund will help position South West Wales as a centre of excellence for renewable technologies while supporting economic growth and ensuring more households can benefit from the lower energy costs these technologies can provide.”
The initiative also links the decarbonisation of housing with the region's wider economic development ambitions.
Rather than viewing the transition to lower-carbon homes solely as an infrastructure challenge, the programme is seeking to create a market opportunity for manufacturers and technology companies based within the region.
Oonagh Gavigan, Homes as Power Stations Project Manager, said:
“This fund is about helping businesses across South West Wales grow, innovate and meet the increasing demand for home energy technologies.
“There is growing interest from households looking to install technologies such as heat pumps, solar panels and battery storage, and this investment will help more of those products and components be manufactured closer to home.
“By supporting businesses to diversify and expand, we can strengthen local supply chains, create high-quality jobs and ensure more of the economic benefits from the transition to low-carbon homes are retained within our region.”
The Homes as Power Stations programme aims to encourage the development of smarter, more energy-efficient homes capable of integrating renewable generation and energy storage.
Developing the supply chain alongside deployment could mean that a greater proportion of the investment required to transform homes translates into contracts, manufacturing activity and employment within South West Wales.
Jonathan Burnes, Portfolio Director for the Swansea Bay City Deal, said:
“The Homes as Power Stations Supply Chain Fund demonstrates how the Swansea Bay City Deal is investing not only in technology and infrastructure, but also in the businesses that will help drive long-term economic growth.
“By strengthening local supply chains and supporting innovation, we are creating opportunities for companies across the region to play a leading role in the transition to smarter, lower-carbon homes.”
Applications for the fund close on 9 November 2026, with successful projects required to allocate and spend the funding by December 2027.
