UK Salix Finance Solar Grant Compliance and Auditing Guide

Key Takeaways

• Salix Finance serves as the official delivery partner managing the Public Sector Decarbonisation Scheme (PSDS) for the UK government.
• Projects must prove tangible progress toward reducing public building emissions by 75% by 2037 compared to 2017 baselines.
• Grant governance requires rigorous milestone tracking, monthly forecasting, and strict financial change controls.
• Solar PV installations are audited as indirect carbon reduction measures, while batteries are monitored as enabling infrastructure.
• Salix grant recipients must verify that all installed renewable generators comply with Distribution Network Operator (DNO) registration mandates.
• Installation contractors must examine equipment parameters to determine whether the DNO must be notified before or after installation.

Institutional Governance and Policy Mandate

Public sector bodies receiving capital grants must understand the regulatory mechanisms governing funding:

• Statutory Grant Scheme: The Public Sector Decarbonisation Scheme provides grants for public sector bodies to fund heat decarbonisation and energy efficiency measures.
• Emissions Target: 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.
• 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.

Funding Allocations and Audit Scope

The rigorous auditing structure reflects the multiannual scale of the grant programme:

• Phase 3 Capital Program: 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.
• Phase 2 Heat Decarbonisation Focus: Phase 2 of the Public Sector Decarbonisation Scheme provided £75 million of grant funding for the financial year 2021-2022. It had a stronger focus on heat decarbonisation than Phase 1 in order to deliver greater carbon emission reductions.
• Public Estate Impact: Schools, hospitals, libraries, town halls and more can boast an array of solar PV panels helping to power their sites, thanks to the Public Sector Decarbonisation Scheme .
• Long-Term Objective: The scheme, delivered by Salix, was launched in 2020 aimed at supporting the UK’s efforts to reach net zero by 2050.

Technical Audit Verification: Solar PV and Storage

Salix technical advisors review capital expenditure against strict criteria:

• Indirect Emissions Verification: Measures that only save indirect carbon (typically electricity savings) such as Solar PV, LED lighting and energy efficient ventilation.
• Enabling Asset Validation: 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.
• Auditors assess sub-metering data, commissioning sheets, and electrical drawings to confirm that solar and battery systems support primary heat pump loads.

Statutory Grid Registration and Contractor Duties

Salix final sign-off requires confirmation of electrical grid compliance:

• Mandatory DNO Registration: 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.
• Contractor Assessment Duty: Installation contractors must examine the energy device and required connection to determine whether the Distribution Network Operator needs to be informed before or after installation.