Scotland’s Public Sector Heat Decarbonisation Fund will provide grant funding for local authorities, universities, and arms-length external organisations to progress whole building approach projects that decarbonise heating systems and improve the overall energy performance of their buildings.
The application portal for projects delivering in the 2025/2026 financial year closed at 2:00 p.m. on 27 May 2025.
Over the next eight weeks we will be assessing your applications, please keep an eye on your email inbox for queries from our assessors. It's important that queries are answered promptly. This will enable us to maintain our proposed timelines and issue grant offer letters by the end of August 2025.
If you have any queries about the fund please contact our Scotland team at ScotlandGrants@salixfinance.co.uk.
Scotland’s Public Sector Heat Decarbonisation Fund will provide grant funding for local authorities, universities and arms-length external organisations to progress whole building approach projects that decarbonise heating systems and improve the overall energy performance of their buildings.
The Scottish Government has made grant funding available within this financial year for projects to decarbonise their heating systems. This will allow organisations to implement clean heating systems, and for retrofit energy efficiency measures to support the overall decarbonisation of heat in buildings.
Please have a look at the accompanying documents to discover more about the fund, including eligibility and criteria.
Objectives
Scotland’s Public Sector Heat Decarbonisation Fund has two strategic objectives:
- To support projects that will replace existing polluting heating systems with clean heating systems.
- To support energy efficiency projects where they can demonstrate that they are part of a whole building retrofit approach or broader strategy for heat decarbonisation, including connections to heat networks.
What's new for Phase 2?
There are some changes that have been made to Phase 2 of Scotland’s Public Sector Heat Decarbonisation Fund. Please have a look at the guidance notes, below, for full explanation of this grant. The main changes are;
- The scheme is launching and looking for projects delivering in financial year 25/26.
- Concept applications have been removed from Phase 2.
- Each assessment criteria must achieve a minimum score of 65%.
- There has been an update of some key terminology. Zero Direct Emission Heating system (ZDEH) is now referred to as clean heating system (CHS), and fossil fuel systems are now referred to as polluting systems.
Who can apply?
Public sector bodies that are subject to the Public Bodies Duties in the Climate Change (Scotland) Act 2009 are eligible to apply for this grant. These organisations remain subject to the existing procurement rules such as the Public Contracts (Scotland) regulations 2015.
Eligible bodies include:
- Local authorities (this includes the local authority estate as well as any educational facilities within their ownership).
- Please note schools will not be able to make a separate application; this should be covered within the relevant local authority’s application.
- Local authority arms-length external organisations.
- Please note: these bodies should take a strategic approach to their whole estate and ensure that the same sites are not included in applications submitted by both the Local authority arms-length external organisations and their parent local authority.
- Universities.
Timelines
- Launch: 26 March, 2:00 p.m., 2025
- Application portal opened: 29 April, 2:00 p.m., 2025
- Application portal closes: 27 May, 2:00 p.m., 2025
- Applications assessments: May/July 2025
- Grant Offer Letters distributed: August 2025
- Webinars: 3 April at 2pm, 9 April at 11:00 a.m., 16 April at 2:00 p.m., 1 May at 11:00 a.m., 22 May at 11:00 a.m.
- Note the times of 11:00 a.m. and 2:00 p.m.