Solar grants and funding for local authorities
Local authorities have the widest set of solar funding routes of any UK organisation type, even with PSDS closed to new applications since November 2024 — dedicated combined-authority capital programmes (GMCA, WMCA, WYCA, MEEF, SYMCA), council borrowing through Public Works Loan Board, and increasingly bespoke partnerships through City Deals and Investment Zones. The portfolio scale of council estate (operational buildings, schools where retained, leisure centres, depots, housing) supports portfolio-level programmes routinely exceeding £5m of qualifying capex.
Realistic expectations (checked 3 November 2026): with PSDS closed, Scottish councils can borrow interest-free from Salix (the Scottish Public Sector Energy Efficiency Loan Scheme is open, and the Recycling Fund needs equal match funding from the council), and Welsh councils through the Wales Funding Programme at a fixed 2.45%. We have not confirmed an open Salix solar loan for English councils, for whom an operating lease or a PPA is the no-capital comparison.
Multiple stacking routes
Funding routes for local authorities
PSDS Phase 4 (closed)
Closed. PSDS closed to new applications in November 2024, and in June 2025 the government said it would fund no projects beyond those already awarded. While it was open, estate-portfolio bids bundling solar, heat pumps and fabric work scored best.
MEEF (Greater London)
Mayor's Energy Efficiency Fund — £500m+ revolving fund providing senior debt at competitive green-finance rates (6–8% APR) for London public-sector and community projects. Solar PV is one of the eligible technologies. Administered by Amber Infrastructure.
GMCA, WMCA, WYCA, SYMCA, NECA, LCRCA
Combined authority Net Zero Capital programmes covering Greater Manchester, West Midlands, West Yorkshire, South Yorkshire, North East, and Liverpool City Region respectively. Each authority operates its own programme with footprint-specific rules and budget allocations.
Public Works Loan Board
PWLB lending available to councils for capital investment including decarbonisation. Standard PWLB rates apply (Bank Rate + small margin). Now a main route for council solar.
UK Shared Prosperity Fund
UKSPF includes funding for council-led economic growth and decarbonisation projects. Allocations vary by authority. Worth investigating with the council's economic development team.
City Deal-specific funds
Cities with City Deals (Bristol City Leap, Cardiff Capital Region, Glasgow City Region, Greater Manchester) have regional investment programmes. Bristol City Leap is particularly notable for solar deployment scale.
Past example: 4.8 MWp across council operational estate (PSDS Phase 3)
- Total capex: £3.84m across 12 sites — civic centre, depots, leisure centres, libraries, sports centres
- Bundled application: solar PV + heat pumps on 6 leisure centres + LED relighting + BMS portfolio upgrades
- PSDS Phase 3 award: 80% (£3.07m) of qualifying capex
- Combined authority capital: 12% (£460k) topping up grant
- Council own resources: 8% (£307k) from capital reserves
- Year-one combined electricity saving: £945,000 across 12 sites
- Heat pump operations: additional ~£165,000/year fossil-fuel displacement
- CO₂ cost-per-tonne: £288
Best application strategy
With PSDS closed, council strategy coordinates the routes that remain: combined-authority programmes where they exist, PWLB borrowing, council reserves, leases and PPAs. Multi-site portfolios still beat single-site projects on overhead-amortised cost. Council estate strategies should be portfolio-led, not site-led.
Local Authorities grants FAQs
Can councils stack multiple grant programmes on a single project?
Does the PWLB still lend for council solar?
How do councils handle solar on schools they retain?
What about council-owned housing — can solar be funded through these programmes?
Are there funding options for council climate action plans beyond capital programmes?
Funding landscape for local authority solar after PSDS
UK councils and local authorities have access to a range of capital grant and concessional loan programmes for commercial solar installation. The Public Sector Decarbonisation Scheme was the main grant from 2020 until it closed to new applications in November 2024; what remains is devolved nation programmes, NWF green infrastructure finance, and local enterprise partnership (LEP) funding in some regions.
Local authorities are among the most eligible and competitive applicants for solar grants because they typically own large building portfolios (civic centres, libraries, leisure centres, depots, car parks), have strong creditworthiness for loan products, and face statutory net zero obligations under the Climate Change Act and associated local government guidance.
Public Sector Decarbonisation Scheme (PSDS): status
PSDS, delivered by Salix Finance, paid capital grants for council estate decarbonisation from 2020. PSDS closed to new applications in November 2024, and in June 2025 the government said it would fund no projects beyond those already awarded. Councils now fund solar from capital budgets, PWLB borrowing, combined-authority programmes, leases or PPAs.
UK Shared Prosperity Fund (UKSPF)
UKSPF replaced EU Structural Funds in 2022 and allocated £2.6 billion to local authorities for community, business, and infrastructure investment. Many councils have carved out "green infrastructure" funding from their UKSPF allocation specifically for council building decarbonisation including solar. Check with your council Energy Manager or Finance department for local UKSPF programme terms.
National Wealth Fund (formerly UK Infrastructure Bank) green loans
The National Wealth Fund (NWF, formerly the UK Infrastructure Bank) provides direct financing and co-investments for public sector green infrastructure. For large council solar programmes (£5m+), NWF can provide below-market-rate debt. This is most relevant for councils building solar car parks, large ground-mount projects on surplus land, or multi-building solar portfolios.
Solar car parks: a growing council priority
Council car park solar economics
Local authority car parks are ideal solar canopy sites. Ground-level parking with overhead panels provides shelter for users, generates electricity for adjacent council buildings (or charges EV fleet vehicles), improves EPC ratings, and generates income from EV charging tariffs.
EV charging revenue
A solar car park with 50kW of EV chargers (10 x 7kW points) can generate £25,000–£40,000/year in charging revenue if utilisation exceeds 50%. This income stream is separate from the energy bill saving and significantly improves project economics.
| Council building type | Typical system size | Annual saving | Was PSDS-eligible? |
|---|---|---|---|
| Leisure centre | 100–300kWp | £24,000–65,000 | Yes (high daytime consumption) |
| Civic / admin offices | 50–150kWp | £12,000–35,000 | Yes |
| Libraries | 25–75kWp | £6,000–17,000 | Yes |
| Council depots / workshops | 100–250kWp | £24,000–55,000 | Yes |
| Car parks (canopy) | 200kWp–2MWp | £48,000–430,000 | Yes (+ EV revenue) |
| Housing offices | 25–75kWp | £6,000–17,000 | Yes |
Procurement requirements for councils
All council solar procurement above the relevant threshold (currently £214,904 for above-threshold works) must comply with the Procurement Act 2023. In practice, most councils use framework agreements — Crown Commercial Service (CCS), YPO, or the South East Shared Services Framework — to access pre-qualified solar installers without running a full OJEU/Find a Tender exercise. This significantly accelerates procurement timelines.
CCS RM6212 Energy Efficiency and Decarbonisation Solutions
A key procurement vehicle for council solar. Pre-qualified lot includes solar PV, storage, and EV infrastructure. Call-off contracts typically take 4–8 weeks, vs 6–12 months for full competitive tender.
Community Benefit obligations
Some LEP and UKSPF grant conditions require community benefit provisions in solar contracts — e.g. apprenticeship commitments, local supply chain, or electricity price guarantees for low-income residents. Build these into your specification if applicable.
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