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Commercial Solar Finance UK · Independent
Schools × PSDS

School solar after PSDS (closed 2024): what schools use now

The Public Sector Decarbonisation Scheme (PSDS) was the main UK grant route for school decarbonisation, but it closed to new applications in November 2024 and Phase 4 is its final phase. This page explains how it worked and what schools use now: CIF where a roof is being replaced anyway, capital reserves, leases and PPAs.

Realistic expectations (checked 3 November 2026): PSDS will not reopen for schools. A school or trust in England without a CIF bid or reserves usually looks at a PPA or an operating lease; in Scotland and Wales, public bodies can borrow through Salix schemes (zero-interest in Scotland, a fixed 2.45% in Wales).

Headline answer

PSDS is closed to new applications (November 2024; Phase 4 is its final phase). While it was open it funded heat decarbonisation projects, and solar was funded as part of a bundle with heat pumps and fabric measures rather than on its own. For a school planning solar now, compare capital reserves, CIF (where the roof is being replaced anyway), leases and PPAs.

Why bundled applications did better

PSDS assessed bids on the cost of the carbon they saved over the project lifetime, against a carbon cost threshold set in each phase's guidance (check gov.uk for the figure in a given phase). Measures that replace gas heating save more carbon per pound than solar does, so bundled projects did better than solar on its own.

The reason: heat pumps replace gas (high carbon) with electricity (low carbon, getting lower as grid decarbonises). The cost-per-tonne calculation captures this efficiently. Solar replaces grid electricity (already partly decarbonised) with on-site generation — same carbon outcome but at higher cost-per-tonne. Bundling them lets the heat pump's strong cost-per-tonne anchor the application while solar offsets the heat pump's additional grid demand.

Multi-academy trust portfolio bids

MATs applying as portfolio bids consistently outperform single-school applications because:

  • Overhead amortisation — application development cost (typically £30-80k) spread across 8-12 schools.
  • Procurement efficiency — single tender for installation across multiple schools delivers 15-25% cost saving vs separate tenders.
  • Stronger evaluation scoring — assessors prioritise scale and replication potential.
  • Internal capacity demonstration — MATs with central estate management score higher than fragmented school-by-school capacity.

Worked example: 8-school MAT bundled bid (illustrative)

Illustrative, modelled example built from published scheme rules, not a real award.

Application: 8-school West Yorkshire MAT, solar + heat pumps + fabric + LED + BMS.

Total project cost: £2.35m across 8 schools.
PSDS grant (modelled): 78% = £1.83m.
Balance (modelled): £520k from the trust's capital programme or borrowing.
MAT direct contribution: £520k, recovered from energy savings in under two years.

Year-1 energy savings across portfolio: £342k.
Net position (modelled): year-1 savings of £342k against a £520k contribution.

Carbon savings: 1,180 tonnes CO₂ year 1; 25,500 tonnes lifetime.

Sector-specific FAQs

Are CIF and PSDS the same thing?
No. Condition Improvement Fund (CIF) is DfE capital for school estate condition improvements (roofs, windows, structural). PSDS was DESNZ grant capital for decarbonisation, delivered by Salix. While it was open, decarbonisation-led solar usually went to PSDS rather than CIF; CIF can fund solar where it is part of replacing a failing roof. PSDS was the primary route until it closed to new applications in November 2024; CIF, capital reserves, leases and PPAs remain.
Could independent schools use PSDS?
No. PSDS was a public-sector scheme, and independent schools (private fee-paying) were never eligible. Independent schools typically use capital purchase or charity-bank loans for solar finance.
What if our MAT has only 3-4 schools?
While PSDS was open, small MATs scored lower than 8-12 school portfolios and sometimes joined adjacent MATs in joint bids. PSDS closed to new applications in November 2024, so a small MAT now compares reserves, leases and PPAs, where a joint procurement can still lower costs.
How long does PSDS application take from start to grant award?
PSDS is closed to new applications (it closed in November 2024 and Phase 4 is its final phase), so there is no application to time. When it was open, bids were made in fixed application windows and funded projects had delivery deadlines set in each phase's guidance.
Can we apply for solar without heat pumps?
Not through PSDS now: it closed to new applications in November 2024. When it was open, solar on its own rarely met the carbon cost threshold, because solar saves less carbon per pound than replacing gas heating. A school planning solar alone now looks at capital reserves, leases or a PPA.

Related content

Schools sector page

Comprehensive schools and academies finance options.

Schools grants detailed page

CIF, reserves, leases and foundation grants after PSDS.

PSDS Phase 4 application analysis

What's working in Phase 4 applications, scoring patterns, common failures.

PSDS and Salix for schools: status

Schools, academies and multi-academy trusts used PSDS as a main source of capital grant until it closed to new applications in November 2024; Salix Finance delivered it for the government. In June 2025 the government said it would fund no projects beyond those already awarded, and we could not confirm an open Salix solar loan for English schools. Independent schools were never eligible.

PPA as an alternative to owning the array

With PSDS closed, a developer PPA is the main alternative to buying the array from reserves or CIF. A school PPA delivers 10–20% below-tariff electricity with zero upfront cost, zero capital commitment, and developer-funded O&M.

School PPA considerations

Ensure the PPA developer handles all planning, structural surveys, and landlord (LA) consents. Academy trusts can contract directly; LA-maintained schools need LA approval. Contract term should not exceed the school building expected useful life.

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