Salix Recycling Fund for solar PV
Salix Recycling Fund 2026 — interest-free loans for public sector solar PV in England. Repaid from energy savings over 5-8 years. Eligibilit...
£20,000 – £2,000,000 typical; up to 100% project funding
Capital grant · Updated 12 May 2026
Public Sector Decarbonisation Scheme for solar PV
PSDS 2026 — 100% capital grant funding for public sector solar PV. Schools, NHS, councils, universities, central government. Application windows and eligibility.
Overview
The Public Sector Decarbonisation Scheme (PSDS) is the UK government's largest single capital fund for public sector net zero infrastructure. It provides 100% grant funding to eligible public sector bodies in England to decarbonise their estates through low-carbon heat (typically heat pumps), energy efficiency (insulation, LED lighting, building management systems) and on-site renewable generation (solar PV being the dominant technology).
Administered by Salix Finance on behalf of the Department for Energy Security & Net Zero, the scheme has run in phases since 2020. Phase 3c closed in early 2024 with over £200m awarded. The combined PSDS programme has funded over 1,000 projects totalling more than £2 billion in public sector decarbonisation capex. Where IETF supports industrial sites and Salix's Recycling Fund supports public sector revenue investments, the PSDS is the heavy-lifting capital programme — and solar PV is one of its most consistently funded technologies because it delivers visible carbon savings, generates verifiable export revenue, and stacks neatly with PSDS's preferred heat pump component.
Key facts at a glance
| Headline grant rate | 100% — fully funded capital grant |
| Typical project size | £100,000 – £5,000,000 |
| Largest awards to date | £15m+ for NHS multi-site programmes |
| Total scheme value (2021-2026) | £3+ billion |
| Eligible nations | England only (Wales, Scotland, NI have separate schemes) |
| Common project mix | Solar PV + heat pumps + insulation + LED + BEMS |
Eligibility criteria
- England-only. Welsh, Scottish and Northern Irish public sector bodies have parallel schemes through the devolved administrations.
- Eligible bodies include: NHS trusts and foundation trusts; primary and secondary state-maintained schools; further education colleges; universities (limited eligibility); local authorities; emergency services (police, fire, ambulance); central government departments and agencies; armed forces estate.
- Excluded: academies in some configurations (check Salix guidance for the latest); independent schools; private healthcare; commercial subsidiaries of public bodies; charities and faith-based bodies (these have separate funding routes).
- Project must deliver verifiable carbon emission reductions tied to the building's heating, lighting or power systems.
- Solar PV must be paired with a wider decarbonisation package — pure solar-only applications are unlikely to score well. PSDS favours integrated retrofit (heat pump + insulation + PV + LED + BEMS).
- Pre-application Expressions of Interest are required.
How to apply
Step 1 — Wait for an open phase.
PSDS funding rounds are highly competitive and oversubscribed within 24-48 hours of opening. Set up alerts via Salix and DESNZ. Subscribe to estate management trade press.
Step 2 — Develop the technical case in advance.
Strong PSDS bids typically have RIBA Stage 2-3 design work already complete at application. Hire an estates consultant or building services engineer 6-12 months ahead of the next funding window. Budget £30k-£100k for design work.
Step 3 — Submit the Expression of Interest.
EoIs are short (1-2 pages) and screening is fast. Successful EoIs receive an invitation to submit a full application.
Step 4 — Full application.
Includes RIBA Stage 3 design, life-cycle carbon assessment, energy savings projection, cost plan to RICS standards, procurement strategy, and project programme.
Step 5 — Salix technical assessment.
4-8 weeks of detailed scrutiny. Common gaps: insufficient carbon savings per £ granted, unrealistic project programmes, weak governance and project management capacity.
Step 6 — Grant Funding Agreement.
Successful awards are paid in arrears against verified milestone delivery. Salix expects projects to complete within 18 months of award.
Step 7 — Post-implementation reporting.
Annual carbon and energy savings monitoring for at least 5 years.
Real-world examples
- NHS South West London Hospital Trust — Phase 3a
£8.4m grant for solar PV + heat pumps across four hospital sites. 5,800 panels installed; 1.7MWp combined capacity. CO2 saving 2,400t/year. - Durham County Council — Phase 3b
£3.1m for school estate decarbonisation across 22 primary schools. Each school received rooftop PV (15-30kWp) plus heat pumps and LED upgrades. - Manchester Metropolitan University — Phase 3c
£2.6m for student accommodation block retrofit. Solar PV (180kWp), air-source heat pumps, fabric insulation, BMS upgrade.
Watch-outs and pitfalls
- PSDS is wildly oversubscribed. Phase 3a (2021) opened on 8 October and was fully committed by 11 October. Subsequent phases have lasted hours rather than days. Be application-ready before the window opens.
- Solar-only applications struggle. PSDS prioritises heat decarbonisation; solar is funded as part of the wider mix. If you cannot make a viable case for replacing fossil-fuel heating, your PSDS prospects are weak — consider Salix Recycling Fund or SEG-driven self-funding instead.
- Project delivery risk is real. PSDS-funded projects must complete by tight deadlines. Around 8% of awarded projects had to repay grant in earlier phases for missed delivery milestones. Procurement and governance maturity matters as much as design quality.
- Carbon factor changes. PSDS uses a published carbon factor for grid electricity that has been falling. A solar project that delivered strong carbon savings in 2020 has weaker carbon credentials today because the grid has decarbonised. Make sure your carbon case uses current published factors.
- Some academies are excluded. Multi-academy trusts have variable eligibility — check Salix's latest published guidance before investing in application preparation.
Stacking with other grants and reliefs
Most successful 2026 commercial solar projects use a combination of schemes — this is where independent advice earns its keep. Public Sector Decarbonisation Scheme for solar PV typically combines well with:
- Salix Recycling Fund for solar PV — £20,000 – £2,000,000 typical; up to 100% project funding
- Smart Export Guarantee for businesses — 3p–15p per kWh exported (2026 fixed tariffs)
Sources & further reading
Related schemes
Interest-free loan Capital grant Income scheme
Other relevant grants & reliefs
Industrial Energy Transformation Fund for solar PV
IETF 2026 guide — match-funded grants of 30-50% for energy-intensive industry in England, Wales, NI. Eligible sectors, application windows, ...
30-50% of project capex (typically £100k-£14m awards)
Smart Export Guarantee for businesses
Smart Export Guarantee 2026 guide for UK businesses — best export tariffs, eligibility for 50kWp+ systems, how to register, and how to combi...
3p–15p per kWh exported (2026 fixed tariffs)
FAQs
Frequently asked questions
What is Public Sector Decarbonisation Scheme for solar PV?
The Public Sector Decarbonisation Scheme (PSDS) is the UK government's largest single capital fund for public sector net zero infrastructure. It provides 100% grant funding to eligible public sector bodies in England to decarbonise their estates through low-carbon heat (typically heat pumps), energy efficiency (insulation, LED lighting, building management systems) and on-site renewable generation (solar PV being the dominant technology).
Is the scheme open for applications in 2026?
As of May 2026, the scheme's funding status is: Phase 3c closed 2024; Phase 4 expected 2026 (re-verify monthly). We re-check application windows monthly — if this is critical to your planning, request an eligibility check for the current programme status.
How much can a UK business get?
Typical award range: 100% of project capex (up to £10m+ for large estates). The size of any individual award depends on project capex, sector eligibility, match funding available and the scheme's per-applicant cap.
Who administers the scheme?
Salix Finance Ltd (on behalf of DESNZ). Applications are submitted through the administrator's process — we link the relevant gov.uk and scheme pages at the bottom of this guide.
What are the biggest pitfalls applicants fall into?
PSDS is wildly oversubscribed. Phase 3a (2021) opened on 8 October and was fully committed by 11 October. Subsequent phases have lasted hours rather than days. Be application-ready before the window opens. Solar-only applications struggle. PSDS prioritises heat decarbonisation; solar is funded as part of the wider mix. If you cannot make a viable case for replacing fossil-fuel heating, your PSDS prospects are weak — consider Salix Recycling Fund or SEG-driven self-funding instead. Project delivery risk is real. PSDS-funded projects must complete by tight deadlines. Around 8% of awarded projects had to repay grant in earlier phases for missed delivery milestones. Procurement and governance maturity matters as much as design quality.
Check if your business qualifies
Free 60-second eligibility check tells you whether Public Sector Decarbonisation Scheme for solar PV applies — and which other schemes can stack.
Run free eligibility check Or call 0800 246 1132