How to apply for 100% grants from the new £1 billion Public Sector Decarbonisation Scheme

Written by

Tim Greenhalgh

Posted on

October 1, 2020

Posted in

A £1 billion fund offering 100 per cent grants has been launched in the public sector for energy efficiency and heat decarbonisation projects in England.

The Public Sector Decarbonisation Scheme (PSDS) is being delivered by Salix Finance, an organisation with vast experience in providing support and funding to public sector organisations for energy-efficiency and low carbon projects since 2004.

The initial deadlines have been extended and all applying to the PSDS can now submit applications up to January 11th, 2021. But if you wish to have your project assessed before the end of 2020, Salix continues to encourage applications to be made by Friday December 11th this year.

The scheme is open to the widest range of organisations in the public sector in England, including schools, colleges, local authorities, and NHS. Those eligible:

  • Local authorities
  • Maintained schools within the state education system, including academies, Multi-Academy Trusts and free schools
  • Institutions of further and higher education
  • Nursery schools maintained by a local authority
  • NHS Trusts and Foundation Trusts
  • Emergency services
  • Central government departments and their arm’s length bodies
  • For central government departments where their roles are reserved (i.e. not devolved to Scottish or Welsh Governments or the Northern Ireland Executive), funding may be used for estates located anywhere within the UK
  • Non-departmental public bodies.

The application process is online and the focus is on non-domestic public sector buildings in England, supporting significant carbon and financial savings and at the same time stimulating the economy.

The Department for Business, Energy and Industrial Strategy (BEIS) has launched the scheme to align with its new mission and priorities of fighting coronavirus, backing business, unleashing innovation and tackling climate change.

The scheme will also encourage green investment, supporting the government’s Net Zero and clean growth goals.

Annie Shepperd OBE, Chief Executive at Salix Finance, advises:

“The announcement paves the way for workers in the energy efficiency sector to see their jobs secured, and, for the country to know that public sector organisations will be leading the way in reducing the carbon footprint of the UK. Salix is wasting no time in opening the application for these funds and we have a great team who are ready to support all public sector organisations who want to be part of this scheme.”

How the scheme works

The scheme aims to improve energy efficiency and install low carbon heating in buildings through measure such as:

  • Insulation
  • Glazing
  • Heating controls
  • Heat pumps.

The grants will finance up to 100% of the costs of capital energy-saving projects that meet the scheme criteria.

Eligible technologies

Eligible technologies are split into 4 categories, explained in the Application Guidance Notes (see link at the end of the article). The document also has a full technology list.

Compliance criteria

  1. The projects are taking place in buildings for which the applicant pays the energy bills and will benefit from any resulting savings. Eligible bodies that do not own the building but have a long-term lease arrangement can apply, provided the contract allows for any savings to be passed to the eligible body.
  2. The cost to save a tonne of carbon (CO₂e) over the lifetime of the project must be no more than £5003, which is automatically calculated by the Support Tool in the Grant Application Form. Projects within Category 3 are exempt from this criterion.
  3. The scheme is primarily for capital works but external consultancy and management fees may be included. Existing employee costs or any costs previously incurred may not be included. Further enabling costs not eligible for the scheme may be eligible for the Low Carbon Skills Fund (see below) where they are related to support to deliver the project.
  4. Reasonable enabling and ancillary works may be included in the application, provided they are directly linked to the core technologies being installed, and these will be reviewed for value for money.

How projects are assessed

Projects will be scored on 3 key areas:

  1. Technical case which will cover areas including the technical feasibility, future resilience, energy/carbon savings calculations and energy monitoring plan.
  2. Financial case which will cover areas including breakdown of project costs, operating and maintenance costs, evidence of firm pricing and any financial savings (where applicable).
  3. Project governance that will cover areas including project risks and mitigations, project implementation/schedule, previous experience, procurement and deliverability within the grant funding time window.

A joint application can be made for more than one eligible public sector body. In this case, a lead applicant should be agreed, who will submit the application on behalf of the group. All measures within a group application can be entered onto a single application form.

Any energy savings resulting from projects funded should benefit the eligible body. Eligible technologies that do not have direct financial or carbon savings are exempt from this requirement.

An example of an ineligible project would be an outsourced estate management contract in which the outsourced supplier pays the energy bills and would benefit from any savings.

Application steps

Applicants are required to download and complete the Grant Application Form, available from the Salix website here. The Excel-based form includes project description, cost breakdown, expected carbon savings, and details on how the proposal meets the scheme criteria.

Public Sector Low Carbon Skills Fund  

Further support is available from the Public Sector Low Carbon Skills Fund. This will provide grants to help eligible bodies source specialist and expert advice to identify and develop energy efficiency and low carbon heat projects before they prepare applications to the Public Sector Decarbonisation Scheme. Those bodies that do not have the capabilities and resources required to submit an effective and robust application for the scheme will be prioritised.

More information about how to apply to the Low Carbon Skills Fund can be found on the dedicated Salix webpage here.  Any questions or enquiries for the Low Carbon Skills Fund should be sent to PSLCSF@salixfinance.co.uk.

Application deadlines for the Low Carbon Skills Fund

  • Project development support: December 4th, 2020.
  • Project delivery and heat decarbonisation plan support: January 11th, 2021.

Salix support

For further information, support or guidance relating to the scheme, contact the dedicated team at grants@salixfinance.co.uk. Salix will aim to reply to initial inquiries within 24 hours.

Download the Public Sector Decarbonisation Scheme Guidance notes here.

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