UK Public Sector Solar and BESS Grant Guidelines

Key Takeaways

• The Public Sector Decarbonisation Scheme (PSDS) provides grant funding for public sector bodies undertaking heat decarbonisation and energy efficiency projects.
• Central to the scheme is achieving a 75% reduction in public building greenhouse emissions by 2037 compared to 2017 baselines.
• Administered by Salix Finance, the scheme funds rooftop solar arrays as indirect carbon reduction measures alongside clean heating systems.
• Enabling measures such as battery energy storage systems (BESS) and electrical switchgear upgrades are eligible to facilitate low-carbon technologies.
• Initial funding under Phase 1 committed £1 billion in grants, followed by over £1.425 billion under Phase 3.
• All installed energy generation devices require formal registration with the relevant Distribution Network Operator (DNO).

Regulatory Framework and Funding Scope

Public organisations, including local authorities, NHS trusts, emergency services, and universities, operate under national decarbonisation frameworks:

• Grant Mandate: The Public Sector Decarbonisation Scheme provides grants for public sector bodies to fund heat decarbonisation and energy efficiency measures.
• Emissions Trajectory: The Public Sector Decarbonisation Scheme supports the aim of reducing emissions from public sector buildings by 75% by 2037, compared to a 2017 baseline.
• Delivery Body: The department’s delivery body, Salix Finance, manages the Public Sector Decarbonisation Scheme. Visit the Salix Finance site for more information about the scheme.
• Heat Decarbonisation Planning: The Public Sector Low Carbon Skills Fund provides grants for public sector bodies to put in place a heat decarbonisation plan, providing them with information they need to develop future applications to the Public Sector Decarbonisation Scheme.
• Eligible Geographies: Both the Public Sector Decarbonisation Scheme and the Public Sector Low Carbon Skills Fund are open to public sector bodies in England and areas of reserved public services across the UK.

Multiannual Grant Allocations

The capital scale of the PSDS represents one of the largest public sector clean energy investments in Europe:

• Phase 1 Foundation: Phase 1 of the Public Sector Decarbonisation Scheme provided £1 billion in grants over the financial years 2020-2021 and 2021-2022 as part of the Chancellor’s Plan for Jobs 2020 commitment to support the UK’s economic recovery from COVID-19.
• Phase 3 Expansion: Phase 3 of the Public Sector Decarbonisation Scheme will provide over £1.425 billion of grant funding over the financial years 2022 to 2023 and 2025 to 2026, through multiple application windows.
• Widespread Reach: Hundreds of public buildings across England have installed energy-saving solar panels thanks to a pioneering Government decarbonisation scheme.
• Net Zero Objective: The scheme, delivered by Salix, was launched in 2020 aimed at supporting the UK’s efforts to reach net zero by 2050.

Technical Criteria: Solar PV and BESS

Public sector applicants must distinguish between direct, indirect, and enabling technologies:

• Indirect Carbon Reduction: Measures that only save indirect carbon (typically electricity savings) such as Solar PV, LED lighting and energy efficient ventilation.
• Enabling Measures: Measures that do not save carbon but enable the installation of measures that do. This can include measures such as electrical infrastructure upgrades, metering, energy storage, etc.
• Integrating battery energy storage allows facilities to store surplus solar generation during weekends and low-occupancy periods, releasing power during peak hours.

Distribution Network Operator Alignment

Connecting renewable assets to distribution networks requires administrative compliance:

• Registration Duty: If you are planning to install an energy device in your home or small business, you are required to register your energy device with your Distribution Network Operator ( DNO ), the company that is responsible for bringing electricity to the property where you are installing the device.