Public Sector Decarbonisation Scheme (PSDS): still closed in 2026. Here's what public bodies can use instead

Public Sector Decarbonisation Scheme: key facts

Is the Public Sector Decarbonisation Scheme open in 2026?

No. The Public Sector Decarbonisation Scheme (PSDS) gave grants to public bodies in England for low carbon heating and energy efficiency. Phase 4, the last round, opened on 9 October 2024 and closed at 2pm on 25 November 2024.

In June 2025, after the Spending Review, the government decided to commit no further investment beyond projects already awarded. Salix, which delivered the scheme for the Department for Energy Security and Net Zero (DESNZ), confirmed "there will be no additional funding for the Public Sector Decarbonisation Scheme". GOV.UK's June 2026 delivery data says "Phase 4 is the final phase of the scheme".

Every PSDS phase at a glance

Phase 3 figures are Salix's award totals; GOV.UK describes Phase 3 as "over £1.425 billion". Across all phases, Salix received 3,654 applications worth about £7.4 billion and awarded 1,466 grants worth about £3.7 billion. That's roughly 4 in 10 applications funded (our calculation). Councils and NHS organisations took around 75% of the money, and 5,978 heat pumps have been or are due to be installed through Phases 3b, 3c and 4.

How Phase 4 worked

• Who: public sector organisations in England, plus bodies with reserved functions in Scotland, Wales and Northern Ireland, meeting the Procurement Act 2023 definition of a public authority.
• What: heat decarbonisation and energy efficiency in public sector buildings.
• Your share: where the project replaced fossil fuel heating like for like, the applicant paid at least 12% of total project costs.
• Carbon test: no more than £510 of grant per tonne of direct carbon saved over the measures' lifetime.

The sister Public Sector Low Carbon Skills Fund, which paid for heat decarbonisation plans, has also stopped. GOV.UK said in May 2025 there would be no funding that financial year, and we found no new round when we checked on 1 November 2026.

Public sector decarbonisation funding open now (November 2026)

Here's everything we could confirm on primary sources on 1 November 2026, by nation. Most of the live money is loans, not grants, and Scotland and Wales have more than England.

Schools and academies: decarbonisation funding after PSDS

PSDS paid for heat pumps and energy upgrades in many schools, so its closure leaves a gap. Here's what still works for solar panels for schools, heat pumps, LED lighting and EV chargers.

Condition Improvement Fund 2027-28: deadline 15 December 2026

The Department for Education's Condition Improvement Fund (CIF) opened on 21 October 2026. It's for stand-alone academies, schools in trusts with fewer than five schools or fewer than 3,000 pupils, small voluntary aided bodies and sixth-form colleges. Councils with maintained schools and bigger trusts get School Condition Allocations instead, and spend those themselves.

• Deadlines: new applicants register for the CIF portal by 12 noon on 30 November 2026. Bids, with all supporting documents, are due by 12 noon on 15 December 2026. Results are expected in May 2027.
• Size: projects from £20,000 (primary and special schools) or £50,000 (secondary, all-through and sixth-form colleges), up to £4 million. The average grant is about £500,000, and on average only around a third of bids succeed. You can also ask for part of the money as a CIF loan at Public Works Loan Board rates.
• Heat pumps: the DfE will consider low carbon heating when a fossil fuel boiler genuinely needs replacing. You must show the condition need, and "sustainability and energy efficiency must not be the sole justification".
• Lighting and solar: the guidance says energy efficiency work such as lighting projects, without a high-need condition issue, is "unlikely to be successful". Fund those another way.

Heat pumps: the Boiler Upgrade Scheme

The Boiler Upgrade Scheme isn't just for homes. It pays £7,500 towards an air or ground source heat pump in a small non-domestic building, for systems up to 45kWth (70kWth with more than one heat pump). Until March 2027, a building heated by oil or LPG with no mains gas connection can get an extra £1,500, so £9,000 in total. The scheme now runs to 2030. Ofgem's guidance for property owners names schools among the organisations that can own an eligible building, with the headteacher able to sign for a school that isn't a company or charity. A building will usually not qualify if public funding has already paid for low carbon heating at the same address. See commercial heat pumps.

EV chargers

State-funded schools get the higher Workplace Charging Scheme rate: up to £2,000 per socket, capped at 75% of costs, for up to 40 sockets, until 31 March 2027. Independent schools use the standard scheme. See the Workplace Charging Scheme guide.

Solar on school roofs

The government's Great British Energy (gbe.gov.uk, not us) is putting solar on around 250 schools and colleges, chosen by government, mainly in deprived areas of the North East, West Midlands and North West. gbe.gov.uk lists no application route. Other schools pay for solar from capital budgets, trust-wide programmes or a PPA. Costs and funding are in our guide to solar panels for schools.

NHS sites, councils and emergency services

Hospitals and NHS sites

The government's Great British Energy solar programme covers around 260 NHS sites, chosen by government, as part of up to £255 million for schools, NHS and military sites. NHS trusts can't apply into it. For everyone else:

• Wales: health boards have no borrowing powers, so they use Invest to Save within the Wales Funding Programme, which is interest-free.
• Scotland: NHS organisations can use the Scotland Recycling Fund and the zero-interest loan scheme.
• England: no open national grant. Capital budgets or a third-party funder are the usual routes.

Hospitals and older estates that need heat and hot water at higher temperatures can look at high-temperature heat pumps. Large staff and visitor car parks can carry solar carports.

Councils

• GBE Partnerships Grant (England, run by the government's Great British Energy at gbe.gov.uk, not us): up to £40,000 to test a project with a community energy group, then up to £100,000 to develop it, from a £5 million pot for 2026 to 2027. The council leads the bid. It's development money, and the window closes on 12 November 2026, so check gbe.gov.uk for the current status.
• Scotland and Wales: Salix loans are open (see the table above). In Wales, the Welsh Government Energy Service gives public bodies technical, commercial and procurement advice on energy projects until March 2027.
• Council buildings: offices, depots, leisure centres, libraries and council-run care homes are all candidates for solar, LED and heat pumps. See commercial LED lighting and solar panels for care homes.

Universities, colleges and emergency services

In Wales, the Wales Funding Programme names universities, colleges and emergency services as eligible. Digarbon, Salix's decarbonisation fund for tertiary education in Wales, has closed round 3. In Scotland, universities and colleges can use the Scotland Recycling Fund. In England, sixth-form colleges can bid to the CIF.

Salix loans in Scotland and Wales: the details

More on each nation: business energy funding in Scotland, Welsh business energy grants and business energy grants in Northern Ireland, where the Workplace Charging Scheme also applies.

Tax, business rates and DECs: what's different for public bodies

Capital allowances usually don't help

For a company, the big lever on solar is tax: Solar panels are special-rate plant for tax. The Annual Investment Allowance (£1 million a year) can write off the cost in year one. Above that, companies can claim the 50% first-year allowance. That only helps if you pay corporation tax. The Corporation Tax Act 2010 says a local authority "is not liable to corporation tax" (section 984), and neither is a health service body (section 985). Charities, which include many academy trusts and universities, pay no tax on most income they use for charitable purposes. So a council, NHS trust or academy gets little or nothing from solar panel capital allowances. Judge projects on bill savings instead.

Business rates: the solar exemption still counts

Business rates are charged on most non-domestic properties. If your building pays them, the renewables exemption applies: In England, on-site solar, and battery storage that mainly stores renewable power, are left out of your rateable value until 1 April 2035, so adding panels doesn't push up your business rates. Wales and Scotland have similar exemptions to 2035. Charities pay business rates with an 80% discount.

Display Energy Certificates

In England and Wales, a building over 250m² that a public authority occupies and the public often visits must display a Display Energy Certificate (DEC) and hold an advisory report. Above 1,000m² the DEC lasts 12 months; from 250m² to 1,000m² it lasts 10 years. The DEC rates the building A to G on its actual metered energy use over the last 12 months. The advisory report that goes with it recommends improvements, which is a good place to start before a business energy audit. Private landlords' rules are different: see commercial EPCs and MEES.

Solar panels for the public sector without a grant

Schools, offices and many other public buildings use much of their power in the daytime, when solar generates, so the case rests on bill savings. Without PSDS, these are the usual ways to fund it:

• Power purchase agreement (PPA): a funder installs and owns the panels, and you buy the power, usually below grid price, for a fixed term. No upfront cost. See commercial solar PPAs.
• Capital budget or invest-to-save: treat it as spend-to-save. DESNZ data puts 10-50kW solar at a median £1,262/kW installed (2025/26). Use our commercial solar panel cost guide for a budget figure.
• Salix loans in Scotland and Wales, repaid from the savings.
• Car parks: hospital, council and university car parks can carry solar carports, often paired with EV chargers.
• Batteries: they shift midday solar into the evening for leisure centres, hospitals and 24-hour sites. See commercial battery storage.

Want to know how much roof space Britain's commercial buildings have? See our commercial rooftop solar potential research. Community-run buildings, churches and charities have their own routes: solar panels for charities and church energy grants. For every route in one place, see commercial solar panel grants and the business energy grants hub.

How we help (and what we don't do)

We don't lend, give grants or write funding bids. Salix, the Department for Education and the Welsh and Scottish governments do that. We help with the step they all need: a costed, surveyed project. Tell us about your site and we pass your enquiry to one suitable installer that does commercial and public sector work, for a survey and a quote with the energy and carbon savings a loan or CIF bid has to show.

Public bodies have procurement rules. A quote from us is a starting point for your business case or framework tender, not a contract award.