Phase 4 of the Public Sector Decarbonisation Scheme will help more organisations achieve their Net Zero ambitions.
Funding
The application portal for Phase 4 of the Public Sector Decarbonisation Scheme closed at 2:00 p.m. on Monday 25 November.
Our teams are now working through applications which are undergoing technical and quality assessment checks. Grants will be awarded as explained in the Phase 4 Public Sector Decarbonisation Scheme Guidance Notes.
Applicants will receive notification of receipt of their application via an automated email. If your project is selected for assessment, applicants should expect questions about their application from Salix and its external technical assessors. Applicants are expected to return information and evidence to the Salix team to meet the assessment queries within four working days.
Grant Offer Letters are expected to be issued by approximately the end of May 2025, with priority given to successful applicants who are securing funding in financial year 2025/26.
Overview of Phase 4 of the Public Sector Decarbonisation Scheme
The Public Sector Decarbonisation Scheme provides grant funding to public sector organisations in England, as well as those with reserved functions operating in the devolved administrations, to install heat decarbonisation and energy efficiency measures in their buildings.
The main strategic objective of the scheme, delivered by the teams at Salix, is to reduce direct carbon emissions from public sector buildings.
Through Phase 4 of the Public Sector Decarbonisation Scheme, the Department for Energy Security and Net Zero (DESNZ) will make capital funding available from 2025/26 to 2027/28. The value of available funding and the profile split across the three financial years will be confirmed in due course.
Applicants should apply for funding across the financial years that best fit the delivery of their project.
Timeline
Funding for Phase 4 of the Public Sector Decarbonisation Scheme was confirmed in December 2023 by the UK government with details published in February 2024. The scheme was launched on 23 September 2024 with the Phase 4 Guidance Notes published on the same day. The portal opened for applications in mid-October and closed on 25 November 2024. Applications will be assessed once the application portal closes, and all successful applications will be awarded funding by approximately the end of May 2025.
Projects must be delivered by 31 March 2028.
Key features
Building eligibility: Applicants will be a public sector organisation in England or have reserved functions operating in the devolved administrations. Applicants must either own the relevant building or have a lease arrangement where the tenancy agreement places the responsibility for operation and maintenance of the building services on the applicant. Buildings with a Private Finance Initiative (PFI) arrangement, where operation and maintenance are funded from PFI unitary charges paid by the applicant, are also eligible.
Existing heating system requirements: Each building within the application must be served by a fossil-fuel heating plant at the end of its useful life. This is generally 10 years or older.
Minimum recipient contribution: Applicants must contribute the cost for a like-for-like replacement of the existing fossil-fuel heating plant at a minimum of 12% of total project costs.
Additionality: The project must be additional; this means that the project would not take place without the Public Sector Decarbonisation Scheme grant. It also must not have already started, and measures must not be required to be installed by law.
Whole building approach: Applicants must consider the inclusion of building fabric improvements and energy efficiency measures as appropriate, where they reduce the heat or electrical demand of the building being heated by the proposed low-carbon heating system.
Proposed heating system requirements: Applications must propose low-carbon heating for all buildings. No technologies reliant on the use of fossil fuels are eligible.