NHS Trust solar PSDS funding — UK 2026 strategy
NHS Trust solar deployment is overwhelmingly funded through PSDS — typically as multi-site bundled applications combining solar with heat pumps and fabric improvements across hospital, community, and ambulance estate. Net Zero NHS framework requirements add political imperative; PSDS provides the capital. Successful NHS Trust applications consistently score in the top quartile of Phase 4 awards.
Headline answer
NHS Trusts are the strongest sector for PSDS solar funding because of estate scale, continuous demand profile, and Net Zero NHS commitment alignment. Bundled applications (solar + heat pumps + fabric) across 5-12 sites typically secure 70-90% grant cover. Salix loans cover residual at zero interest.
Why NHS Trusts are the top PSDS sector
NHS Trust applications consistently outperform other public-sector applications because:
- Continuous demand profile — 24/7 hospital operations support 90%+ self-consumption. Solar generates exactly when needed.
- Multi-site estate scale — Trusts typically operate 5-15 buildings (acute hospital, community hospitals, ambulance stations, corporate). Portfolio applications win.
- Heat decarbonisation imperative — Net Zero NHS requires gas-out across the estate. Heat pumps anchor the cost-per-tonne calculation; solar provides clean grid offset.
- Strong delivery capacity — Trusts typically have estate management resource to deliver multi-site programmes. Assessors weight delivery capacity highly.
Worked example: 8-site Trust portfolio
Application: East Midlands NHS Trust, 8 estate sites (1 acute hospital, 3 community hospitals, 2 ambulance stations, 2 corporate buildings).
Total project: 2.4 MWp solar + heat pumps on 3 community sites + LED relighting across all 8 sites = £1.92m.
PSDS grant: 75% = £1.44m.
Salix loan: 25% = £480k at zero interest over 10 years.
Trust direct contribution: £0 (cash); operational savings repay Salix loan.
Year-1 electricity saving: £478k (solar) + £62k (heat pump fossil-fuel offset).
Carbon saving year 1: 1,180 tonnes CO₂; lifetime 25,500 tonnes.
Cost-per-tonne: £284/tonne — well within Phase 4 soft cap of £350.
NHS-specific application considerations
Three areas where NHS applications differ from other public-sector PSDS bids:
- Critical care continuity — installations on acute hospital roofs need careful sequencing around clinical operations. Some sub-array deployment over weekends, holidays. Adds 6-10% to installation cost.
- Foundation Trust vs DHSC route — Foundation Trusts have more capital flexibility. DHSC-managed Trusts work through central capital programmes. Application route varies.
- Estate condition baselines — many NHS estate roofs are 30-40 years old; structural assessment often identifies remedial work alongside solar deployment. Sometimes funded via CIF-equivalent NHS capital alongside PSDS.
Sector-specific FAQs
Do all NHS Trusts qualify for PSDS?
Can we use PSDS to fund a single hospital solar project?
How does Net Zero NHS interact with PSDS?
What's the typical PSDS grant percentage for NHS solar?
Can we combine PSDS with private-sector partner financing?
Related content
Public Sector Decarbonisation Scheme: NHS Trust applications
The Public Sector Decarbonisation Scheme (PSDS) is the primary government grant funding route for NHS Trusts seeking to install commercial solar and other low-carbon technologies. Administered by SALIX Finance on behalf of the Department for Energy Security and Net Zero, PSDS provides capital grants — not loans — covering 60–100% of eligible project costs for NHS estates decarbonisation projects.
NHS Trusts, NHS Foundation Trusts, and NHS Property Services buildings are all eligible. The scheme operates in phases (Phase 1, 2, 3 and now Phase 3e/4), with each phase having its own application window, eligibility criteria, and funding envelope. Understanding how to position solar within a broader decarbonisation strategy is key to maximising PSDS grant capture.
Eligible costs and funding levels
| Technology | PSDS eligible? | Typical funding rate | Notes |
|---|---|---|---|
| Rooftop commercial solar (PV) | Yes | 60–80% of project cost | Must be part of a broader heat decarbonisation plan |
| Battery storage | Yes (if paired with solar) | 60–80% | Standalone storage less favoured |
| Heat pumps (ASHP/GSHP) | Yes — priority technology | Up to 100% for deep retrofit | Core PSDS focus |
| LED lighting upgrade | Yes (ancillary) | 60–80% | Often bundled with solar project |
| EV charging infrastructure | Partial — check current guidance | 50–70% | Subject to transport emissions scope |
| Solar carpark canopies | Yes | 60–80% | Growing emphasis in Phase 3e+ |
How NHS Trusts maximise PSDS grant awards
Bundle solar with heat pump projects
PSDS prioritises heat decarbonisation. A standalone solar project is less competitive than a combined solar + air-source heat pump project that replaces gas boilers. Build a whole-building energy strategy before applying.
Commission a Decarbonisation Plan
SALIX funding for a pre-application Decarbonisation Plan (typically funded separately via SALIX loan at 0% interest) provides the evidence base for a PSDS application. This document must demonstrate a credible pathway to net zero by 2050.
Energy Performance Certificate baseline
PSDS applications require current EPC data for all buildings in scope. Ensure EPCs are current (within 10 years) and identify all improvement opportunities — this strengthens applications for larger grant awards.
Prioritise worst-performing buildings
SALIX allocates higher scores to projects targeting buildings with poor EPC ratings (D, E, F) or high fossil fuel dependency. A hospital wing heated entirely by gas with an E-rated EPC is a strong PSDS candidate.
PSDS application process for NHS Trusts
| Stage | Timeline | Key actions |
|---|---|---|
| Pre-application assessment | 4–8 weeks | Commission energy audit, identify eligible buildings, prepare carbon baseline data |
| Application preparation | 4–8 weeks | Develop Decarbonisation Plan, complete SALIX application portal, obtain contractor quotes |
| SALIX assessment and scoring | 6–12 weeks | SALIX reviews application, may request further information, scores against criteria |
| Conditional award notification | — | Grant award letter with conditions precedent |
| Procurement and delivery | 6–18 months | Public procurement required (Framework or full OJEU/Find a Tender) |
| Post-project monitoring | 2 years | Carbon savings reporting, M&E verification, SALIX final payment |
Capital cost funding not covered by PSDS
Where PSDS covers 60–80% of costs, the remaining 20–40% must come from NHS Trust capital budgets, the NHS Infrastructure Loan (0% interest SALIX loan), or in some cases a PPA for the portion of solar not covered by capital grant. SALIX also operates a separate 0% interest loan scheme for public sector bodies that can cover the unfunded element.
SALIX 0% loan
Available to NHS Trusts alongside PSDS grants. Repaid from the energy savings generated by the project — effectively free money if the project genuinely reduces energy costs.
NHS Sustainability and Transformation Funding
Some ICSs (Integrated Care Systems) have capital allocation for sustainability projects. Engage your ICS finance team alongside the PSDS application.
PPA for remaining capacity
If PSDS grant covers a portion of the installation but additional generation capacity is needed, a developer-funded PPA for additional array area can complement the grant-funded element.
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