NHS Trust PSDS Phase 4 application strategy: a retrospective

PSDS Phase 4 was the final round. PSDS closed to new applications in November 2024 and Phase 4 is its final phase. In that round, the patterns that separated funded Trust bids from unsuccessful ones had less to do with technology choice than with how the bid was framed and what scope it covered. This is a record of those patterns: the scheme is closed.

The cost-per-tonne metric is everything

PSDS assessed bids on the cost of the carbon saved over the project lifetime, against a carbon cost threshold set in each phase's guidance; the scheme closed to new applications in November 2024. Solar-only NHS Trust applications struggled here because hospital electricity demand was partly already decarbonised on the grid — solar offset grid imports that average ~0.18 kg CO₂/kWh, so solar alone saves less carbon per pound than measures that replace gas heating.

Bundled applications won. Heat pump installations replaced direct gas heating (CO₂ factor ~0.21 kg/kWh), where carbon savings per pound spent were stronger. Solar combined with heat pumps and fabric efficiency therefore scored better on the carbon cost test.

The multi-site portfolio approach

Portfolio-level bids had advantages that single-site bids did not. A Trust bid could combine several estate sites:

• Acute hospital — large continuous-load site, strong solar self-consumption, partial heat-pump opportunity
• Community hospitals — typically 2–6 per Trust, smaller scale, heat-pump opportunity often substantial (gas-heated buildings)
• Ambulance HQ + ambulance stations — operational estate with day-and-night demand profiles
• Mental health units — variable demand, strong fabric and BMS opportunities
• Corporate offices and admin sites — daytime demand, easier solar deployment

Why portfolio bids did better: the cost-per-tonne metric averaged across the bundle, so sites with strong economics (community hospitals with heat-pump bundles) pulled down the average. Single-site bids were evaluated alone.

The bundled-package recipe

Funded Phase 4 NHS bids typically combined four interventions:

1. Air-source heat pumps on community hospital and gas-heated estate

   Highest cost-per-tonne benefit. Replaces gas heating with electricity-driven heat. Combined with solar PV creates substantial Scope 2 reduction.

2. Solar PV across acute hospital and rooftop-suitable estate

   Provides electricity for heat pumps and broader site demand. Strong continuous self-consumption on 24/7 hospital sites.

3. LED relighting across the entire estate

   Smaller individual saving but very low cost-per-tonne. Lifts the bundled metric.

4. Building management system upgrades

   Optimises heat pump and solar performance. Provides demand-management capability for winter peak periods.

Phase 4 timeline

The Phase 4 application window ran from 9 October to 25 November 2024. It is closed, no further round has been announced, and in June 2025 the government said it would fund no projects beyond those already awarded (Salix, 12 June 2025).

What weakened a bid

Solar-only bids struggled on cost per tonne, and bids that relied on annual consumption rather than half-hourly demand modelling, or that named no delivery resource and had no credible plan from engagement to completion, made a weaker case. None of this applies to a new bid, because the scheme has closed.

What Trusts can do now

PSDS is closed, so there is no bid to prepare. For the routes open to public bodies now, see public sector solar funding in 2026.