Salix PSDS funding for office solar

The PSDS application process requires: a credible decarbonisation pathway document (typically Heat Decarbonisation Plan), evidence of board / committee sponsorship, a clear capital and operational cost-benefit analysis, and a delivery timeline aligning with funding window milestones.

We have delivered Salix PSDS-funded solar installations across 18 public-sector clients since 2022, including local authorities, FE colleges, and NHS trusts. We prepare the PSDS application paperwork as part of the project proposal — typically saving 60-100 hours of in-house effort and significantly improving application strength.

PSDS Phase 4: current programme details

Salix PSDS Phase 4 is the current active programme, running from 2023-2025 with an initial allocation of £1.425 billion. The Department for Energy Security and Net Zero (DESNZ) funds Salix Finance to administer competitive grant rounds, typically opening in January-March each year. Applications are evaluated on a cost-per-tonne-CO₂-saved basis over 20 years, with solar PV performing well against most other measures because of its established cost trajectory and measurable yield data.

Funding intensity varies by project type and competitive demand in any given round. In recent rounds, standalone solar PV projects have received 60-85% grant funding (not 100%), while solar combined with other heat decarbonisation measures (heat pumps, MVHR, fabric upgrades) typically attracts higher intensity, sometimes up to 100% for NHS and local authority applications demonstrating exceptional CO₂ impact.

The minimum grant award in Phase 4 is £100,000 (excluding small grant schemes). The maximum per project in a single round is £6m, though portfolio applications across multiple buildings can exceed this. Our NHS Trust case study (580 kWp, £1.2m grant) sits in the middle of the typical award range.

What makes a strong PSDS application for office solar?

PSDS is competitive — typically 3-5x oversubscribed in recent rounds. The difference between a funded and unfunded application usually comes down to three factors:

1. CO₂ savings per pound of grant: Applications with lower cost-per-tonne perform better. Solar PV on a high-consumption building (server rooms, 24/7 operations) achieves lower cost-per-tonne than on a low-consumption building. Sizing the system to maximise self-consumption — rather than just maximising peak generation — improves the metric.
2. Delivery credibility: PSDS applications require a credible contractor appointment or competitive procurement evidence. Applications backed by fully-costed contractor proposals (fixed-price, with programme certainty) score higher than those with preliminary budget estimates.
3. Financial additionality: Salix needs to be satisfied the project wouldn't proceed without grant funding. For most public-sector bodies, this is straightforward — capital constraints mean solar would remain on the 5-year plan indefinitely without PSDS. The business case should make this explicit.

We prepare the technical sections of the PSDS application — PVSyst yield model, CO₂ savings calculation in Salix's required format, capital cost breakdown, delivery programme aligned with Salix milestone payments, and contractor credentials pack. This service is included in the proposal process at no additional charge for qualifying public-sector clients.

PSDS: what happens after an award

Successful PSDS applications receive a grant offer letter from Salix specifying the award amount, milestone payment schedule, and programme completion deadline (typically 18-24 months from award). The programme is contract-managed by Salix with milestone payments at:

• Contract award (25%)
• Commencement on site (25%)
• Practical completion (50%)

We structure project delivery programmes specifically around PSDS milestone dates, ensuring evidence packs (contract documents, site commencement certificates, MCS commissioning certificates) are ready for Salix drawdown claims on the exact milestone dates.

Alternative public-sector funding routes alongside PSDS

PSDS is not the only route for public-sector office solar. Other options include:

• UK Infrastructure Bank (UKIB) Green Loans: For projects over £5m. Lower interest rate than commercial finance but requires UKIB's project appraisal process.
• Local authority PWLB borrowing: Councils can borrow from the Public Works Loan Board at HM Treasury rates (currently 4.4-4.8%). Combined with solar's £/kWh savings, the net cost of borrowing can be lower than the energy cost avoided.
• NHS Green Plan Capital: Separate from PSDS, NHS England makes capital available via Green Plan commitments for net-zero estate projects.
• Power Purchase Agreement (PPA): Available to any public sector body — no capex, immediate bill reduction, with the developer claiming capital allowances. Particularly useful where PSDS is not available or capex headroom is exhausted.