The Scottish Government is putting an additional £4 million towards the development of district heating networks.
The cash will help fund projects including geothermal and solar heating which are expected to reduce pressure on household energy bills.
Scotland has set a target of supplying 40,000 homes with affordable warmth and low carbon heat through district heating by the end of the decade.
Energy Minister Fergus Ewing said: “We are committed in helping support households across Scotland that are affected by increasing energy bills and today’s announcement moves that one step forward in driving down costs to consumers.
“Scotland is an energy rich nation where heat accounts for over half of all energy we use, with an estimated £2.6 billion a year being spent on heating and cooling in Scotland.”
The amount takes the total funding for the next two years to £10.5 million.