Fast-tracking digital grant management for heat pumps

Introduction

To accelerate the green energy transition and reduce CO2 emissions, the Danish government introduced a subsidy program to help citizens replace oil and gas heating systems with green, electricity-powered heat pumps

Case metrics

Key statistics

>67%

of applications approved automatically in just a few minutes after opening up for new applications in the F2 system *

<24

hours for citizens to receive notifications about awards compared to the weeks or months typical in manual systems

12

weeks to go live with a fully configured system, including integrations

The challenge

Scaling a high-volume subsidy program

The initiative stems from Denmark’s 2018 Energy Agreement and subsequent climate deals, aiming to phase out fossil fuel heating before 2030. With approximately 400,000 homeowners relying on fossil fuel-based heating, the goal was to swiftly transition to more sustainable options. For homes unable to access district heating, subsidies for heat pumps became a key part of the solution. To achieve the necessary speed, transparency, and cost-effectiveness, the Danish Energy Agency needed a robust, digital system to manage the high application volumes efficiently.

The Heat Pump Project was essential for Denmark’s climate goals, but it came with several operational challenges:

• Surge in applications: The program expected to receive thousands of applications, requiring a system that could manage and process them quickly.

• Legacy limitations: Traditional manual processing methods would have introduced delays, creating bottlenecks that could slow down subsidy distribution and frustrate citizens.

• Maintaining public trust: Slow responses and unclear processing timelines could damage confidence in the subsidy scheme, undermining its effectiveness.

• Budget oversight: Since the subsidy was offered on a first-come, first-served basis, real-time tracking of approved grants was necessary to avoid overspending.

The Danish Energy Agency required a digital solution capable of scaling seamlessly during peak periods, ensuring fast and transparent processing without compromising compliance, control, or citizen experience.

The solution

Automating subsidy approvals for efficiency and transparency

To meet these demands, the Danish Energy Agency implemented a digital platform leveraging Commercial-Off-The-Shelf( COTS) technology tailored for government processes. This modern platform transformed subsidy management through smart automation and seamless data integration.

Key elements of the solution included:

1. Automated eligibility checks: When an application was received, the system instantly validated data against official registries, including the Danish Building Registry (BBR) for existing heating types and the Central Heating Planning Database for district heating availability. If central heating was available or planned, applications were automatically declined.

2. First-come, first-served allocation: The system continuously tracked the total value of approved applications and automatically closed for new applications when the budget ceiling was reached, ensuring full transparency in fund allocation.

3. Seamless process automation: For eligible applicants, the platform automatically validated home ownership, checked for duplicate applications, and generated approvals without manual intervention. Successful applicants were notified within 24 hours, setting anew benchmark for public service responsiveness.

4. Compliance with oversight: Cases requiring manual review were handled under a four-eyes principle, ensuring proper checks and managerial sign-off. This balance of automation and oversight preserved both speed and compliance.

5. End-to-end caseflow management: From initial application to payment request after heat pump installation, the platform handled the full lifecycle, including accounting and archiving. Applicants were given two years to complete installations, and the system automatically tracked and triggered payment flows after installation documentation was submitted.

This combination of data integration, automation, and oversight resulted in a faster, more citizen-friendly process, while enabling the Danish Energy Agency to manage large volumes of applications with minimal manual work.

The result

Fast implementation and dramatic reduction in manual workload

The digital platform was configured and deployed in just 12 weeks, including full integration with government registers and subsidy case flows.

The result was a system capable of automatically handling a significant portion of applications — from submission to payment — without requiring manual case handling. This automation drastically reduced administrative burdens compared to previous subsidy programs and ensured applicants experienced fast, transparent processing.

With notifications delivered within 24hours and clear real-time visibility into subsidy spending, the Danish Energy Agency not only accelerated the green transition but also set a new standard for efficient, citizen-centric public sector service delivery.

* Based on a new version introduced in 2025

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