PSDS vs IETF: which UK capital grant for commercial solar?
Two major UK capital grants fund commercial solar in 2026 — the Public Sector Decarbonisation Scheme (100% grant, public sector only) and the Industrial Energy Transformation Fund (30-50% match-funded, energy-intensive industry only). They are not interchangeable: each applies to a distinct set of organisations.
Side-by-side comparison
| Feature | PSDS | IETF |
|---|---|---|
| Grant rate | 100% of qualifying capex | 30-50% of qualifying capex (match-funded) |
| Typical award size | £100k - £5m | £100k - £14m |
| Eligible bodies | Public sector in England — schools, NHS, councils, universities | Energy-intensive manufacturers, food processors, chemicals, paper, metals, ceramics |
| Administrator | Salix Finance (for DESNZ) | DESNZ direct |
| Geographic scope | England only (devolved equivalents elsewhere) | England, Wales, Northern Ireland (Scotland separate) |
| Application process | Pre-application EoI → full application → technical review | Pre-application EoI → full application → Five Case Model → independent technical assessor |
| Time from window opening to award | 4-8 months | 9-15 months |
| Funding round frequency | Phased — Phase 4 expected 2026 | Phased — Phase 4 expected Q2 2026 |
| Solar-only applications? | Rare — prefers integrated heat pump + insulation + solar package | Rare — prefers solar + process electrification + waste heat recovery |
| Total programme value | £3+ billion (2021-2026) | £500m (2021-2028) |
Which one for your business? Real scenarios
State-maintained primary or secondary school
PSDS — 100% grant. Eligible directly. Apply through Salix.
NHS Foundation Trust hospital
PSDS — large awards available. Combined heat pump + solar packages typical.
Multi-academy trust
PSDS, subject to academy-type eligibility. Some academy types qualify; check current Salix guidance for your trust structure.
Local authority (council) building
PSDS — eligible directly. Most council solar in 2024-2026 is PSDS-funded.
Food & drink manufacturer (private sector)
IETF — strongest sector for IETF awards. Solar + heat recovery + refrigeration efficiency package.
Heavy engineering / steel / metals fabricator
IETF — eligible. Combine PV with process electrification or waste heat recovery.
Pharmaceutical manufacturer
IETF — eligible. Cleanroom load makes solar economics strong.
Private hospital (Spire, Nuffield, BUPA)
Neither directly applies. Private healthcare typically uses AIA / Full Expensing tax relief + SEG + finance.
Charity, third sector or independent school
Neither directly applies. Use AIA / Full Expensing + SEG + charitable trust funding routes.
Key deciding factors
- Are you a public sector body in England? → PSDS is the route.
- Are you an energy-intensive manufacturer with Climate Change Levy main-rate liability? → IETF.
- If neither, you're in the private commercial market — use tax reliefs + SEG + finance.
- Both PSDS and IETF strongly prefer integrated decarbonisation packages over solar-only.
- Both have long preparation timelines (12-18 months pre-application work typical).
Comparison FAQs
Can I apply for both PSDS and IETF on the same project?
No — they target different sectors. PSDS for public sector; IETF for energy-intensive private-sector industry. The eligibility criteria are mutually exclusive at the organisational level.
Are devolved-nation equivalents available?
Yes for both. PSDS-equivalent: Scotland (Scottish Government Public Sector Pathway), Wales (Welsh Government Energy Service), Northern Ireland (Invest to Save). IETF-equivalent: Scotland has a parallel Industrial Energy Transformation Fund managed by Scottish Government.
How long does an IETF application typically take?
From decision to apply through to grant award is typically 9-15 months. Pre-application preparation (project design, energy auditor, match funding arrangement) typically 6-12 months. Total: 18-24 months end-to-end for complex projects.
Is PSDS funded for solar alone?
Rarely. PSDS scoring favours integrated decarbonisation — typically heat pumps + insulation + LED + solar + BMS as a combined package. Solar-only applications historically underscore against integrated bids.
Want a personalised comparison for your business?
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