Smart Export Guarantee for businesses
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3p–15p per kWh exported (2026 fixed tariffs)
Interest-free loan · Updated 12 May 2026
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. Eligibility and process.
Overview
The Salix Recycling Fund is the UK's longest-running public sector energy efficiency finance scheme — established in 2004 and now responsible for over £1 billion of zero-interest loans to schools, NHS trusts, universities and councils. Unlike the PSDS (which is a non-repayable grant), the Recycling Fund is a loan — but at 0% interest, with repayments structured to match the energy savings the project delivers. As loans are repaid, the capital is recycled into the next round of public sector projects.
For solar PV, the Recycling Fund is particularly useful when the PSDS window is closed or the project cannot wait for the next capital grant round. The loan is repaid from the verified savings the solar installation delivers — typically 5-8 years of self-consumption savings plus SEG export income — so the public body's cashflow remains net-neutral or positive from year one.
Key facts at a glance
| Interest rate | 0% — interest-free |
| Repayment period | Typically 5-8 years (capped at project payback) |
| Maximum loan size | £2m typical; larger by negotiation |
| Minimum payback requirement | Project must repay loan from verified energy savings |
| Application route | Direct to Salix Finance |
| Eligible nations | England (Scotland, Wales, NI have separate Salix programmes) |
Eligibility criteria
- England-only. Wales has a parallel Salix Wales programme; Scotland has Salix Scotland; Northern Ireland has the Invest to Save (ItS) scheme.
- Eligible bodies: primary and secondary state schools; FE colleges; universities; NHS trusts and foundation trusts; local authorities and the GLA; emergency services; central government estates; armed forces.
- The project must have a verifiable payback within the loan term — typically 5-8 years for solar.
- Solar PV qualifies as a 'compliant technology' under the Salix Compliant Technology List.
- There is no minimum project size officially, but Salix tends to focus on projects above £20k of capital expenditure.
- Energy savings must be measurable and reportable — typically through smart-meter data feeds or building management systems.
How to apply
Step 1 — Self-assess eligibility via Salix's online portal.
The portal checks your body type, project type and indicative payback.
Step 2 — Prepare a project business case.
Salix provides a financial modelling template — typically a one-page summary plus a 3-tab spreadsheet covering baseline energy use, projected savings, capex breakdown and loan repayment schedule.
Step 3 — Submit a Compliant Technology Application.
For solar PV, the application requires: panel specification, inverter brand, mounting details, MCS-certified installer quote, and an Energy Performance Certificate for the building.
Step 4 — Salix technical review.
Typical timeline 6-10 weeks. Salix may push back on optimistic energy savings projections — be conservative on self-consumption rates (assume 50-60% self-consumption rather than 80%).
Step 5 — Loan agreement and drawdown.
Salix releases funds in tranches matched to project delivery milestones — typically 50% on contractor mobilisation, 40% on commissioning, 10% on first-year savings verification.
Step 6 — Post-installation reporting.
Annual energy data reporting for the duration of the loan, demonstrating the project is delivering the agreed savings. If savings exceed projections, the loan can be repaid early at no penalty.
Worked examples
Example: Secondary school in Birmingham, 800 pupils, £85,000 solar PV install.
- Project capex: £85,000 (50kWp roof, no battery, MCS-certified installer). - Annual saving: £8,500 (self-consumption + SEG). - Salix loan: £85,000 at 0% interest. - Repayment schedule: £10,625/year over 8 years. - Net school cashflow: minus £2,125/year for 8 years (annual saving below the loan repayment), then plus £8,500/year for the remaining 17 years of system life. - 25-year net benefit: approximately £127,500.
The school pays slightly more than its energy savings during the loan period — but the project is fully funded with no capital outlay, and after year 8 the annual savings convert entirely to school budget.
Watch-outs and pitfalls
- Stack with PSDS when possible. Many public sector bodies fund a project partly through PSDS grant and partly through Salix loan — typically PSDS covers the heat pump and BMS, Salix covers the solar PV component.
- Be conservative on self-consumption. Salix's technical team test optimistic energy savings projections rigorously. Schools typically achieve 45-55% self-consumption (school holidays, summer break align poorly with peak solar generation); offices and 24/7 sites are higher.
- MCS certification matters. Salix's Compliant Technology List requires MCS for systems up to 50kWp. For larger systems, Salix accepts the MCS standard as a benchmark even where Ofgem allows engineering sign-off.
- Loan repayment is from your existing budget. Even though the project pays for itself in cash terms, the loan repayment line in your finance system means you need budget headroom to service the loan from year one.
- Eligibility for academies and MATs is variable. Some academy trusts qualify; others don't. Check the current Salix guidance for your specific trust type.
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. Salix Recycling Fund for solar PV typically combines well with:
- Smart Export Guarantee for businesses — 3p–15p per kWh exported (2026 fixed tariffs)
Sources & further reading
Related schemes
Income scheme Advisory + small capital grant
Other relevant grants & reliefs
Carbon Trust Green Business Fund — SME energy efficiency support
Carbon Trust Green Business Fund 2026 — energy assessments, advice and capital grants for SME decarbonisation including solar PV. Eligibilit...
£1,000 – £5,000 typical capital grant (programme-dependent)
FAQs
Frequently asked questions
What is Salix Recycling Fund for solar PV?
The Salix Recycling Fund is the UK's longest-running public sector energy efficiency finance scheme — established in 2004 and now responsible for over £1 billion of zero-interest loans to schools, NHS trusts, universities and councils. Unlike the PSDS (which is a non-repayable grant), the Recycling Fund is a loan — but at 0% interest, with repayments structured to match the energy savings the project delivers. As loans are repaid, the capital is recycled into the next round of public sector projects.
Is the scheme open for applications in 2026?
As of May 2026, the scheme's funding status is: Rolling applications (subject to fund availability). 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: £20,000 – £2,000,000 typical; up to 100% project funding. 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. 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?
Stack with PSDS when possible. Many public sector bodies fund a project partly through PSDS grant and partly through Salix loan — typically PSDS covers the heat pump and BMS, Salix covers the solar PV component. Be conservative on self-consumption. Salix's technical team test optimistic energy savings projections rigorously. Schools typically achieve 45-55% self-consumption (school holidays, summer break align poorly with peak solar generation); offices and 24/7 sites are higher. MCS certification matters. Salix's Compliant Technology List requires MCS for systems up to 50kWp. For larger systems, Salix accepts the MCS standard as a benchmark even where Ofgem allows engineering sign-off.
Check if your business qualifies
Free 60-second eligibility check tells you whether Salix Recycling Fund for solar PV applies — and which other schemes can stack.
Run free eligibility check Or call 0800 246 1132