Public Sector Solar Funding

Salix Finance and PSDS for Solar: Where Public-Sector Funding Stands in 2026

The Public Sector Decarbonisation Scheme closed to new applications in November 2024 and no successor round has opened. This guide explains what Salix funded, what is open today, and how schools, NHS estates and councils are funding solar in the meantime.

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Salix Finance Ltd is the government-owned company that administers public-sector decarbonisation funding for the Department for Energy Security and Net Zero (DESNZ) and for the Scottish and Welsh governments. For solar PV, the programme most people mean when they say "Salix" is the Public Sector Decarbonisation Scheme (PSDS), the 100% capital grant that funded whole-building decarbonisation across schools, NHS estates, universities, councils and emergency services. PSDS closed to new applications in November 2024. Phase 4 was the final round announced, and as of October 2026 no further window has opened. This page is written for the position today rather than the position in 2023.

What PSDS was, and what it funded

PSDS ran in phases from 2020 (Phase 1) through Phase 3a, 3b, 3c and Phase 4. It paid a grant covering the capital cost of measures that cut a building's direct carbon emissions. Solar PV was eligible as part of a wider package rather than as a stand-alone measure: the scheme's scoring favoured whole-building projects, so most funded solar sat alongside heat-pump replacement of gas boilers, LED lighting and fabric improvements. Funded bodies agreed a grant funding agreement with Salix, drew the money against delivery milestones and reported verified savings afterwards.

The scheme's published guidance and the lists of awarded projects remain on gov.uk. They are the right source for what a comparable body received; this page does not quote award sizes, because the figures vary by phase and scope and any single "typical award" would be misleading.

What is open today

  • PSDS (England): closed to new applications since November 2024. Awarded Phase 3 and Phase 4 projects are still being delivered. No successor has been announced as of October 2026; check gov.uk and salixfinance.co.uk for any change.
  • Salix loans in England: the earlier recycling-fund loan route is not open to new applicants. Do not plan a 2026 solar project around an interest-free England Salix loan.
  • Scotland and Wales: Salix delivers loan and grant programmes for the devolved governments with their own eligibility and application windows. Public bodies there should check the current programme on the Salix site rather than rely on England guidance.
  • Private businesses: never eligible for Salix. The private-sector routes are the 100% Annual Investment Allowance, the Industrial Energy Transformation Fund for energy-intensive manufacturers, and the Smart Export Guarantee for export income.

Who was eligible for PSDS

Eligibility is listed here because it still describes who a future phase would most likely cover, and because it is the first question most readers have.

  • State-funded schools and academies in England, including free and special schools, whether local-authority maintained or in an academy trust.
  • Further and higher education: sixth-form colleges, FE colleges and universities. Independent fee-charging institutions were not eligible.
  • NHS bodies: trusts and foundation trusts. GP practices generally sat outside the scheme unless the building was owned by an eligible body.
  • Local authorities: county, district, unitary and borough councils and combined authorities. Town and parish councils were generally too small to apply alone.
  • Emergency services: police, fire and rescue, and ambulance trusts.
  • Central government departments and arms-length bodies.

How public bodies are funding solar now

  1. Capital budgets. Schools in academy trusts can bid for the Department for Education's Condition Improvement Fund where the project meets its criteria; maintained schools work through their local authority's capital programme; NHS trusts through NHS capital allocations. Solar is usually bundled with roof or plant work that is due anyway.
  2. Borrowing. Local authorities can borrow for invest-to-save projects where the saving covers the financing cost; the finance team will want the yield model and tariff assumptions behind the business case.
  3. Power purchase agreements and leases. A third party funds and owns the system and the body buys the electricity at an agreed rate, or leases the equipment. No capital is spent, the saving is smaller, and the contract length and accounting treatment need review before signing. See PPA vs cash purchase.
  4. Community and local energy partnerships. Some councils and schools host community-owned arrays under a long-term roof lease and power purchase arrangement.

Being ready if a new phase opens

Earlier PSDS phases rewarded bids that were ready to deliver: verified baseline meter data, a clear whole-building scope, a procurement route and a realistic programme. That preparation is not wasted while the scheme is closed, because the same evidence underpins a capital-budget case or a PPA negotiation.

  • Twelve months of half-hourly electricity data and the gas or heat baseline for the building.
  • A current Display Energy Certificate or EPC.
  • A roof condition and structural view, and an asbestos survey where the building pre-dates 2000.
  • A costed options appraisal: solar alone, and solar with heat and lighting measures, with carbon savings for each.
  • A procurement route the body can use quickly, such as an existing framework, so that an award can be acted on within its delivery window.

Checking the installer

Whatever the funding route, the installer should hold MCS certification for the technology, be registered with an electrical competent-person scheme such as NICEIC or NAPIT, and work to BS 7671. Each can be checked on the scheme register rather than taken on trust. We publish this site and do not install; the contract is between the public body and the firm doing the work.

Salix Finance and PSDS FAQs

Is the Public Sector Decarbonisation Scheme (PSDS) open for solar applications in 2026?

No. PSDS closed to new applications in November 2024, when the Phase 4 application window shut. Phase 4 was the final round announced, and as of October 2026 no successor window has opened. Projects already awarded under Phases 1 to 4 are being delivered, but a school, NHS trust or council cannot submit a new PSDS bid for solar today. Check gov.uk and salixfinance.co.uk for any announcement of a further phase.

What is Salix Finance?

Salix Finance Ltd is a government-owned company that administers public-sector decarbonisation funding on behalf of the Department for Energy Security and Net Zero (DESNZ) and the devolved governments. In England it administered the Public Sector Decarbonisation Scheme grants. It also delivers loan and grant programmes for the Scottish and Welsh governments. It does not fund private businesses.

Can a public body still get an interest-free Salix loan for solar in England?

Not through an open England-wide Salix loan programme as of October 2026. The earlier recycling-fund loans in England are not open to new applicants. Public bodies in Scotland and Wales should check the current devolved programmes that Salix delivers for their governments, which have their own eligibility and windows. The reliable source for what is open today is salixfinance.co.uk.

Which bodies were eligible for PSDS when it was open?

PSDS funded public-sector bodies in England: central government departments and their arms-length bodies, state-funded schools and academies, further and higher education institutions, NHS trusts and foundation trusts, local authorities, and emergency services. Private businesses were never eligible, and a private landlord could not apply on behalf of a public-sector tenant.

How do schools, NHS trusts and councils fund solar now that PSDS is closed?

The routes in use are capital budgets (including Department for Education capital allocations and Condition Improvement Fund bids for eligible academies), NHS capital programmes, local-authority borrowing, and off-balance-sheet routes such as a power purchase agreement or lease where the body cannot or does not want to spend capital. Each has different accounting treatment, so the finance team should be involved before an installer is appointed.

Can solar be combined with heat pumps and LED in a single public-sector project?

Yes, and PSDS bids were scored on whole-building carbon savings rather than single measures, which is why most funded projects combined solar PV with heat decarbonisation, lighting and fabric work. A combined scope still makes sense without a grant: one procurement, one scaffold, one set of building-regulations sign-offs, and a single carbon-reporting baseline.

How does Salix differ from the Industrial Energy Transformation Fund (IETF)?

Salix administers public-sector programmes. IETF is a DESNZ grant for private-sector energy-intensive industry such as manufacturing, food and drink processing, chemicals, paper and ceramics. The two do not overlap: a private factory cannot apply to Salix and a state school cannot apply to IETF. See the IETF guide on this site for the private-sector route.

What should a public body do now to be ready if a new phase opens?

Keep the evidence base current: 12 months of half-hourly meter data, Display Energy Certificates or EPCs, a roof condition and structural view, and a costed options appraisal for solar with and without heat and lighting measures. In its earlier phases PSDS rewarded bids that were ready to deliver (the scheme is now closed), and that evidence is useful for capital-budget and PPA decisions in the meantime.

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