British Energy and Climate Change Minister Greg Barker said using energy from waste, or what he described as recovered heat from the industrial sector, would help advance a low-carbon economy.
"Heat networks are a defining part of our smarter, cleaner energy future," he added in a statement Wednesday.
Grants for 24 local communities are valued at a combined $3.4 million. More than 50 local communities since January 2014 have received similar developmental grants ranging in value from $24,000 to $410,000 each.
As part of a broader European agreement, the British government is committed to using renewable energy to meet 20 percent of its demand by 2020.