Public Sector Solar Funding
Reviewed by the Commercial Solar Finance editorial team — independent advisers (we take no installer or lender commissions). Last reviewed: June 2026.
Public bodies have the strongest funding position of any organisation installing solar in the UK. Between the Public Sector Decarbonisation Scheme, Salix interest-free loans and the devolved schemes, an NHS trust, council, school or university can often fund a solar system at effectively zero net cost. This hub explains every public-sector solar funding route and who qualifies.
Public sector solar funding in brief
The core route is PSDS (grants up to ~80%) topped up with Salix 0% loans for the balance — repaid from energy savings, so the body pays nothing upfront. Scotland and Wales run their own schemes. Below: every route and eligibility.
Public sector solar funding routes compared
| Scheme | Who for | Funding | Notes |
|---|---|---|---|
| PSDS (Public Sector Decarbonisation Scheme) | NHS, councils, schools, universities in England | Grant up to ~80% | Competitive rounds via DESNZ portal; the core route |
| Salix interest-free loans | English public bodies | 0% loan for the balance | Repaid from energy savings; pairs with PSDS |
| Scotland (SEEL / NDEEF / area schemes) | Scottish public & non-domestic bodies | 0% loans + grants | Devolved — see Scotland grants |
| Wales (Welsh Government Energy Service) | Welsh public sector | Funded support + Salix Wales | Devolved delivery |
| UKSPF (local allocations) | Some local public & community bodies | Grant, varies | Check with the local authority |
How PSDS + Salix delivers zero-net-cost solar
The combination is what makes public-sector solar so compelling. PSDS covers up to ~80% of the capital as a grant; Salix covers the remaining ~20% as a 0% loan; and the Salix repayment is met from the electricity-bill saving the system generates. The result for a typical trust or council is a solar system installed with no upfront capital and a loan that self-funds from savings — cash-flow positive from year one.
| Project | PSDS grant (80%) | Salix 0% loan (20%) | Net upfront cost |
|---|---|---|---|
| Hospital 250kWp / £300k | £240,000 | £60,000 | £0 |
| School 50kWp / £60k | £48,000 | £12,000 | £0 |
| University 1MWp / £1.2m | £960,000 | £240,000 | £0 |
Getting public sector solar funding: the route
PSDS runs in competitive rounds with specific application windows, and applications need a carbon baseline, contractor quotes and a cost-per-tonne-CO₂ business case — on which solar scores very well. The detailed step-by-step is on our PSDS eligibility and application page; NHS bodies should also see the NHS solar finance guide. We prepare PSDS and Salix submissions end to end, independently of any installer.
Related public-sector guides
Why public bodies are in the strongest position
A private business funding solar relies on tax relief and energy savings to make the numbers work. A public body has those plus a grant covering most of the capital. That is a structural advantage no commercial structure can match: where a company might see a five-to-seven-year payback, a PSDS-funded public project can be cash-flow positive from year one, because the grant removes most of the capital and the Salix loan that covers the rest is repaid from the saving itself. The constraint is not economics — it is the competitive, windowed nature of the grant rounds, which is why preparation and timing matter so much.
What makes a strong public sector solar funding bid
PSDS bids are scored heavily on cost-effectiveness — the grant cost per tonne of CO₂ saved. Solar performs very well on this metric compared with heat-pump or fabric measures, which is why solar elements often strengthen a wider decarbonisation bid. A strong application pairs a clear carbon baseline (from Display Energy Certificates or half-hourly data) with two contractor quotes and a Green Book-style business case for larger projects. Bodies that have not applied in the last 24 months should prepare now to be ready for the next window rather than scrambling when it opens.
We prepare PSDS and Salix submissions end to end and model the funding stack against the body's estate. Start with PSDS eligibility and application, and for health bodies the NHS PSDS pathway.
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