Commercial Solar Finance for NHS Trusts
NHS sites run 24/7 with large roofs and continuous electricity demand, which suits solar plus battery; with PSDS closed, trusts now weigh capital budgets, leases and PPAs. See how an modelled PSDS-era East Midlands NHS Trust example (2.4MWp across 8 sites).
200kWp – 2MWp per site
£160k – £1.6m per site
Among the highest of any sector
About 5 years with no grant (worked example below)
Why this sector
NHS trusts represent the largest single category of public-sector commercial solar opportunity in the UK. The estate combines vast roof area, continuous clinical demand for electricity, and an active decarbonisation mandate via NHS Net Zero. The technical and economic case is exceptionally strong: 90%+ self-consumption, predictable demand and a robust covenant for any financing. The complications are governance and estate. Most trusts have 5–25+ buildings of mixed ownership (NHS-owned, NHS Property Services, Community Health Partnerships, private PFI), each with different decision-making and contracting routes. PFI buildings in particular are often constrained by PFI contracts that prevent third-party installations. We typically recommend trusts begin with the buildings they own outright, sequence other estate categories as PFI contracts wind down, and plan solar alongside heat decarbonisation and battery resilience in one estate programme. The integration of battery with hospital PV is increasingly attractive — batteries provide both peak-shaving for capacity charge reduction and resilience capability that supports clinical continuity in grid-failure scenarios.
Electricity profile
Continuous 24/7 demand from clinical operations, imaging suites, IT, HVAC, and lighting. High and stable baseload. Self-consumption typically 90%+ — most generation absorbed directly by the site at all times.
Tax position
NHS trusts are public bodies, not subject to corporation tax. Capital allowances irrelevant for tax purposes. Funding decisions made on capital cost, energy savings, and contribution to NHS Net Zero targets.
Sector-specific funding
PSDS was the main grant route until it closed to new applications in November 2024. Trusts now fund solar from capital allocations, operating leases or PPAs; some integrated care system (ICS) capital programmes include decarbonisation, and Great British Energy has paid for solar on selected NHS sites in England through rounds run with NHS England; the 2026/27 round closed to applications on 22 June 2026.
Worked example
Acute hospital trust, three sites. Combined 2.8MWp PV across estate roofs plus 1.5MWh battery storage at the main acute site for resilience and peak shaving.
£2.4m PV + £700k battery = £3.1m
£610,000 year-one combined (PV self-consumption, battery TRIAD avoidance, capacity charge reduction)
About 5.1 years on the full £3.1m (no grant), from the year-one saving above
Estate capital allocation, or an operating lease or PPA (PSDS grants have closed)
Pitfalls to watch
- Estate complexity — multiple buildings, mixed ownership, PFI considerations
- Roof access during clinical operations requires careful programme planning
- Asbestos prevalent in older estate — survey and management costs
- Resilience and clinical continuity priorities may favour battery alongside PV
- PFI building constraints can prevent installations on parts of the estate
- Procurement under PCR 2015 / NHS frameworks adds complexity
- ICS-level governance may require coordination across multiple trusts
Recommended finance structures
Other sectors
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Schools
Schools now fund solar from capital budgets, leases or PPAs; PSDS closed in November 2024.
Detailed finance route for this sector
NHS Trust commercial solar — detailed guide
NHS Trusts are among the UK's highest-priority targets for commercial solar installation, driven by the NHS Net Zero commitment (NHS England Net Zero by 2040 for direct emissions), and the significant electricity costs that affect all NHS estates. The NHS estate covers 6,000+ sites with an annual electricity bill exceeding £600m.
Funding after PSDS: what NHS trusts use now
The Public Sector Decarbonisation Scheme (PSDS) paid capital grants to NHS trusts in four phases 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. Trusts planning solar now fund it from their capital allocation, an operating lease or a power purchase agreement.
Great British Energy has paid for solar on selected NHS sites in England through rounds run with NHS England: the first, announced in March 2025, covered about 200 sites at 78 trusts, and the 2026/27 round closed to applications on 22 June 2026. We found no further round announced when we checked on 2 November 2026, so plan around routes the trust controls.
NHS estates electricity profile
| NHS site type | Annual electricity (typical) | Key loads | Solar self-consumption | Best finance route |
|---|---|---|---|---|
| District General Hospital (500+ beds) | 15m–30m kWh | Medical gases, HVAC, imaging, kitchens | 40–55% | Capital allocation, lease or PPA |
| Community hospital (50–150 beds) | 2m–6m kWh | HVAC, ward lighting, medical equipment | 55–70% | Capital allocation or operating lease |
| Mental Health Trust (campus) | 3m–8m kWh across campus | HVAC, residential-style loads | 60–75% | Capital allocation or PPA; estate often has good roof access |
| GP surgery / primary care network | 100k–400k kWh | Consulting room HVAC, IT, lighting | 70–80% | GP practice capital investment or lease |
| NHS ambulance station | 50k–200k kWh + EV charging | Lighting, heating, EV fleet charging | 65–80% | Capital purchase or operating lease |
Regulatory and governance: NHS solar procurement
Procurement threshold requirements
NHS procurement is subject to the Procurement, Concessions and Contract Regulations 2024 (PCCR — successor to PCR 2015). Above the Works threshold (£5.3m), a full public procurement process is required. Solar projects below this threshold can use NHS framework agreements (NHS SBS, Crown Commercial Service, NHS Shared Business Services Energy Procurement) — typically much faster (4–6 months) than a full tender process. Most Trust solar projects fall in the £500k–£5m range and are procured via framework.
Net Zero Impact Assessment
NHS England's Greener NHS programme requires all capital projects above a Trust's internal threshold to include a Net Zero Impact Assessment (NZIA). Solar PV projects are straightforwardly compatible with the NZIA framework — the carbon saving calculation from solar displacing grid electricity is directly quantifiable and verifiable.
Frequently asked questions
What's Net Zero NHS and how does it affect Trust solar projects?
How do multi-site Trust solar applications work?
Can Trust trading subsidiaries capture FYA on solar?
How do NHS trusts fund solar now PSDS has closed?
Are there NHS-specific foundation grants for solar?
Commercial solar finance for NHS trusts: a full funding guide 2026
NHS trusts face a unique commercial solar finance challenge: the estate is large (typically 10–50 separate buildings), the energy consumption is high and largely non-discretionary, and the funding route — capital allocation, operating lease or PPA — has profound implications for NHS accounting treatment, capital control totals, and CQC reporting. Getting the finance structure right can mean the difference between a 25-year solar programme that transforms the trust's net zero trajectory and a project that stalls at procurement.
NHS trust solar finance routes: what qualifies for which structure
| Finance route | NHS accounting treatment | Capital control total impact | Best for NHS trust type |
|---|---|---|---|
| PSDS grant (closed Nov 2024) | Capital receipt (not loan); no balance sheet liability | No impact on capital control totals | Not available for new projects since November 2024 |
| Salix loan (Scotland and Wales) | Balance sheet liability; repaid from energy savings | Counts against capital control total in year of drawdown | We could not confirm an open Salix solar loan for English trusts |
| Operating lease (private sector) | Off-balance-sheet under NHS FT accounting guidance | No capital control total impact (if structured correctly) | FTs with capital constraints |
| Power Purchase Agreement (PPA) | Revenue expenditure; off-balance-sheet | No impact | Organisations wanting zero capital; accepts energy pricing risk |
| Capital purchase (NHS capital budget) | On-balance-sheet asset; depreciation via P&L | Full capital commitment; requires CDEL approval | Trusts with available capital budget and strong internal business case |
| NHS Net Zero Estates Initiative (NZEI) blended finance | Grant + loan; structure varies by round | Partial capital control impact depending on structure | Selected NHS systems in priority net zero programme areas |
Choosing a route now PSDS has closed
PSDS was non-repayable capital, so trusts used it first while its windows were open. PSDS closed to new applications in November 2024, and in June 2025 the government said it would fund no projects beyond those already awarded. The decision now: (1) Does the trust have capital allocation for the project this year? If so, capital purchase keeps the savings in the trust. (2) If not, an operating lease or a PPA moves the capital cost to a provider. (3) Check whether NHS England is running a Great British Energy solar round; the 2026/27 round closed on 22 June 2026. We could not confirm an open Salix solar loan for English trusts.
What PSDS bids taught trusts, and what still applies
PSDS scored bids on the cost of each tonne of carbon saved, so trusts that bundled solar with heat pumps and fabric work across several sites did best. The same groundwork (half-hourly data, roof surveys and a site-by-site carbon baseline) still decides whether a lease or PPA provider will quote, even though PSDS closed to new applications in November 2024.
Private sector solar finance for NHS trusts: when it makes sense
| Scenario | Best private sector route | Why it fits |
|---|---|---|
| Trust has no spare capital this year | Operating lease | No trust capital needed; the lessor funds the array |
| Solar-only project | Private PPA or operating lease | No national grant since PSDS closed in November 2024 |
| Car park solar canopy (not on estate building) | Private PPA or operating lease | Canopy structures add cost; a PPA moves that cost to the provider |
| Trust has capital control total constraint | Operating lease (off-balance-sheet per NHS accounting guidance) | Capital commitment not available; operating lease keeps spend as revenue |
| Large hospital with 24/7 baseload (hospital never off) | Long-term PPA (20–25 years) | PPA rate certainty over 25 years valuable for a trust with no overnight demand variation |
NHS trust solar: the four numbers you need before any finance conversation
Before approaching any lender or PPA developer, an NHS trust needs four numbers: (1) Annual electricity consumption by site in kWh — pull from ePIC or half-hourly meter data; (2) Available roof area in m² (structural survey required — NHS roofs are often heavily plant-loaded and smaller than they appear); (3) Current grid electricity tariff in p/kWh — including climate change levy (CCL) and distribution charges; (4) Heating fuel mix: % gas, % heat network, % electric — this shows how much carbon a combined heat and solar project would save. With these four numbers the finance route checker below shows which structures fit.
NHS solar after PSDS: a 2026 checklist
PSDS closed to new applications in November 2024, and in June 2025 the government said it would fund no projects beyond those already awarded, so the PSDS bid guide that sat here has been withdrawn. What a trust needs now:
1. A site list with annual electricity use, roof area and roof condition for each building the trust owns outright (PFI buildings usually need the PFI provider's consent).
2. A route decision: capital purchase from the trust's capital allocation, an operating lease, or a power purchase agreement where a provider funds and owns the array.
3. A check on Great British Energy rounds run with NHS England: the 2026/27 round closed on 22 June 2026, and we found no announced successor on 2 November 2026.
4. Procurement through an NHS-approved framework, with the DNO connection (often the longest step) started early.
More routes: public sector solar funding after PSDS, including the devolved schemes.
Explore the funding routes:
Finance route checker
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Go deeper: zero-capital solar routes · funding for commercial solar.
Phase 4 was the final PSDS phase; our public sector solar guide sets out the routes trusts use with no grant window open.
Welsh health boards can use the Wales Funding Programme through Salix; see the Wales region guide.
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