Commercial Solar Finance for Schools & Academies
Schools now fund solar from capital budgets, leases or power purchase agreements; PSDS closed to new applications in November 2024. For how PSDS worked and what replaced it, see our Public Sector Decarbonisation Scheme guide.
30kWp – 300kWp per school
£25k – £250k per school
60%–85% depending on sizing strategy
Model without a grant (PSDS closed)
Why this sector
Schools and multi-academy trusts (MATs) used to sit in the strongest grant position of any sector: PSDS funded large shares of bundled solar, heat pump and fabric projects. 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 strategic move for a MAT now is a portfolio plan funded from reserves, CIF where roofs are being replaced, leases or PPAs, with surveys, design and procurement framework selection done before committing capital.
Electricity profile
School-day skew: heavy demand 8am–4pm Mon–Fri term-time; minimal demand evenings, weekends, and holidays. Self-consumption depends on system sizing — modest systems sized to school-day demand achieve 80%+ self-consumption; larger systems export significantly during summer holidays.
Tax position
Schools and academies are not typically subject to corporation tax (academies are exempt charities; LA-maintained schools are within local authority accounting). Capital allowances are not relevant for tax purposes. The financial case rests on capital cost and direct electricity bill savings, not after-tax returns.
Sector-specific funding
PSDS was the dominant funding route until it closed to new applications in November 2024. Schools now use capital reserves, CIF where a roof is being replaced, leases and PPAs.
Worked example
Multi-academy trust, West Yorkshire. 8 secondary schools with portfolio rooftop PV totalling 1.2MWp, bundled with air-source heat pumps in 4 schools.
£950,000 PV + £1.4m heat pumps = £2.35m total project cost
£215,000 year-one combined energy savings
Past PSDS-era example: under 3 years on the trust's £520k residual contribution
PSDS Phase 3 grant (78% of qualifying spend) + capital reserve allocation; PSDS has since closed to new applications.
Pitfalls to watch
- PSDS has closed; plans built around a grant need a new funding route
- Application work is intensive — 80–150 hours of effort per submission
- Tight grant delivery windows (12–18 months) require ready-to-go procurement
- Procurement compliance under PCR 2015 mandatory above thresholds
- Roof condition on older school buildings often requires re-roofing first
- Holiday-period generation may exceed school demand — battery or export limit consideration
- Trust governance for multi-school applications adds 3–6 weeks to programme
Recommended finance structures
Other sectors
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NHS
NHS sites run 24/7 with large roofs and continuous electricity demand, which suits solar plus battery.
Detailed finance route for this sector
Commercial solar for schools and academies — detailed guide
UK schools — including maintained schools, academy trusts, independent schools, and further education colleges — benefit from above-average solar self-consumption (daytime academic hours align closely with peak solar generation), and face increasing pressure from governors, parents, and the Department for Education to reduce carbon emissions.
Funding for the education sector after PSDS
The Public Sector Decarbonisation Scheme (PSDS) was the main grant for academy trusts and state schools. PSDS closed to new applications in November 2024, and in June 2025 the government said it would fund no projects beyond those already awarded. Schools and MATs now fund solar from capital reserves, CIF where a roof is being replaced anyway, finance or operating leases, or PPAs; Great British Energy has also paid for solar on selected schools in England through government-run rounds.
Academy trust vs maintained school: different routes
| School type | Capital funding route | Procurement requirement | Tax position | FYA eligibility |
|---|---|---|---|---|
| Academy Trust (charitable company) | Independent capital, fundraising, lease or PPA | Public Contracts Regulations if >threshold (or academy trust's own procurement policy) | Charitable exempt — corporation tax not applicable | Charities cannot directly claim FYA |
| LA-maintained school (primary/secondary) | LA capital programme or lease | Full local authority procurement rules apply (OJEU/PCR) | Public sector — not a tax-paying entity | No FYA benefit |
| Independent school (charity) | Independent fundraising, charity grant, crowdfund, capital campaign | Charity procurement governance (usually trustees) | Charitable exempt on educational activities | No FYA benefit |
| Further Education college (incorporated) | Reserves, leases, commercial finance | Further education corporation procurement governance | FE corporations are not CT-paying for exempt activities | No FYA benefit — but can use capital for own account |
| Free school / University Technical College | CIF (roof-led), reserves, lease or PPA | DfE procurement guidance | As academy trust — charitable exempt | No FYA benefit |
School solar performance benchmarks
| School type | Annual electricity | Solar system size | Self-consumption | Annual saving | Indicative installed cost (no grant) |
|---|---|---|---|---|---|
| Primary (400 pupils) | 80,000–150,000 kWh | 30–50kWp | 75–85% | £7,200–£12,000 | £27,000–£48,000 |
| Secondary (1,500 pupils) | 400,000–800,000 kWh | 100–200kWp | 70–80% | £22,000–£46,000 | £87,000–£177,000 |
| Sixth form college / FE | 600,000–2m kWh | 150–400kWp | 65–75% | £33,000–£86,000 | £132,000–£348,000 |
| MAT (10 schools, bundled) | Combined 4m–8m kWh | 1MWp–2MWp | 70–80% blended | £220,000–£440,000 | £870,000–£1,740,000 |
The cost column is the indicative installed cost, at about £880 per kWp, with no grant: PSDS closed to new applications in November 2024, so a school funds solar from its own budget, a loan, a lease or a PPA. All figures use £0.24/kWh avoided import cost assumption and P50 yield for southern England; northern sites produce approximately 15% less.
Frequently asked questions
Can schools still get PSDS?
Could independent schools use PSDS?
What's the typical school solar project size?
How does solar interact with school environmental curriculum?
Are there school-specific foundation grants for solar?
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Related reading: funding for commercial solar · commercial SEG rates.
PSDS closed to new applications in November 2024, so there is no next window to plan for.
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