PSDS Phase 5
PSDS Phase 5 Solar Funding — UK Public Sector
Public Sector Decarbonisation Scheme Phase 5 (open through 2027) funds solar PV alongside heat pump and electrification projects across UK schools, NHS, councils, leisure trusts, and universities.
£1.4bn
Phase 5 budget
Up to 100%
Grant intensity
2026–2027
Application window
Public sector
Eligibility
The Public Sector Decarbonisation Scheme (PSDS) is the UK's flagship public-sector low-carbon grant programme, administered by Salix on behalf of DESNZ. Phase 5 (open through 2027) provides capital grants for heat pump installation, solar PV, and energy efficiency across schools, NHS, councils, universities, and other public-sector estates.
Who Is Eligible
- Local authorities (councils, parish councils)
- NHS Trusts and Foundation Trusts
- Schools (state schools, academies, MATs, free schools)
- Universities and FE colleges
- Police, Fire, Ambulance services
- National museums and galleries
- Public-sector leisure trusts (subject to public-sector classification)
- Central government departments and arm's-length bodies
What PSDS Phase 5 Funds
- Heat pump replacement of fossil-fuel heating (primary funding focus)
- Solar PV when integrated with heat pump or electrification project
- Battery storage when integrated
- Building fabric improvements (insulation, glazing)
- Building management systems
- LED lighting upgrades
- Smart heating controls
Grant Intensity
- Typically 80–100% of capital cost where heat pump replaces fossil-fuel heating
- Solar PV typically funded at 50–75% as supporting infrastructure
- Project must demonstrate cost-effectiveness on £/tCO2 abated
- Maximum grant per project: defined per round
Application Process
- Pre-application — register interest with Salix.
- Project design — energy survey, SAP modelling, cost-effectiveness analysis.
- Stage 1 application — submit project proposal with technical specification.
- Stage 2 application — final commercial terms and project plan.
- Award and grant agreement — typically 4–8 weeks after Stage 2.
- Project delivery — typically must complete within 24 months of award.
- Post-installation reporting — verified performance data.
Real PSDS Project Examples (From Our Fleet)
- UK Multi-Academy Trust — 4 schools, 450kWp solar, PSDS funding 70%. Read case study.
- NHS Acute Trust — 380kWp, PSDS funding 75%. Read case study.
- Council leisure centre — 250kWp + air-source heat pump, PSDS funding 95%.
How We Support PSDS Applications
- Energy survey and SAP modelling
- Heat pump + solar integrated design
- Cost-effectiveness analysis (£/tCO2)
- Stage 1 + Stage 2 application authoring
- Project delivery to PSDS spec
- Post-installation monitoring and reporting
Common PSDS Pitfalls
- Solar-only applications without heat pump component — typically rejected. Solar must be integrated with electrification.
- Insufficient cost-effectiveness data — must demonstrate £/tCO2 ratio against PSDS thresholds.
- Site readiness gaps — DNO connection availability, planning consent, building structural survey all required at application.
- Tight delivery timelines — projects must complete within 24 months; late delivery risks grant clawback.
Frequently Asked Questions
What is PSDS Phase 5?
Public Sector Decarbonisation Scheme Phase 5 — UK government grant scheme funding heat pump replacement of fossil-fuel heating, solar PV, and energy efficiency upgrades across public-sector estates. £1.4bn budget; open through 2027.
Can solar-only projects qualify for PSDS?
Generally no — PSDS targets heat pump replacement of fossil-fuel heating as primary outcome. Solar qualifies as supporting infrastructure when integrated with electrification of heating. Standalone solar applications typically rejected.
How much PSDS grant can I claim?
Typically 80–100% of capital cost where heat pump replaces fossil-fuel heating. Solar PV typically 50–75% as supporting infrastructure. Cost-effectiveness on £/tCO2 abated drives grant allocation.
Who can apply for PSDS?
UK public-sector bodies — local authorities, NHS Trusts, schools, universities, police, fire, ambulance, national museums, public-sector leisure trusts, central government departments.
How long does PSDS application take?
Concept-to-award typically 4–6 months. Project delivery must complete within 24 months of grant award. Post-installation verification 2–3 years.
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PSDS Solar Funding: Public Sector Decarbonisation Scheme Explained
The Public Sector Decarbonisation Scheme (PSDS) provides grant funding to public sector bodies in England for capital investment in heat decarbonisation and energy efficiency. Phase 5 of the PSDS is targeted at non-domestic public sector buildings including schools, hospitals, leisure centres, council offices and emergency services buildings. Solar PV is eligible under PSDS when combined with heat decarbonisation measures (heat pumps, low-carbon heating) — solar-only applications are not eligible under PSDS, but solar as part of an integrated decarbonisation package is a strong application.
PSDS grant rates are typically 50-67% of eligible project costs for Phase 5. For a school investing in an air source heat pump plus solar PV package (total project cost £120,000), a 67% PSDS grant would provide £80,400 in funding — leaving the school to fund only £39,600 from its own capital or via Salix Finance (the complementary 0% interest loan scheme that covers the remaining 33% in many PSDS projects). Our public sector energy team co-designs PSDS applications and project specifications to maximise the likelihood of grant award.
Can a school apply for PSDS for solar-only installation?
PSDS Phase 5 does not fund solar-only projects — at least one heat decarbonisation measure (heat pump, low-carbon heating, insulation) must be included. Schools with existing gas heating can use PSDS to fund replacement with a heat pump, with solar included in the same application as an enabling measure supporting the heat pump. Schools already on electric heating can apply for solar under the energy efficiency strand alongside other efficiency measures. We can assess your school's eligibility and design the most fundable project package — contact our public sector team.
What is the difference between PSDS and Salix Finance for school solar?
PSDS is a grant — money that does not need to be repaid. Salix Finance is a 0% interest loan — capital that must be repaid from energy savings. Many public sector projects combine both: PSDS funds the grant-eligible portion (typically 50-67% of eligible costs), Salix funds the remaining balance at 0% interest. For school solar, pure Salix Finance (100% loan) is available even without a PSDS grant for solar-only installations, giving 0% cost of capital and immediate energy saving cash flow from commissioning. Contact our team to discuss the best funding structure for your school's project.
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Get a Free QuoteContact Our Public Sector Funding Team
Our public sector energy team has experience with PSDS applications, Salix Finance drawdowns and the combined PSDS-plus-Salix funding structures that many public sector bodies use. We prepare full application documentation and liaise with DESNZ and Salix Finance on your behalf. Contact us today to discuss whether PSDS Phase 5 is open for your application type and to start the eligibility assessment process for your organisation's building portfolio.
PSDS Phase 5 rounds open and close on the DESNZ grant finder portal — timing varies and remaining funding can be claimed quickly in popular phases. Contact our public sector funding team today to check current Phase 5 availability and start the eligibility assessment for your organisation's buildings.