The Public Sector Decarbonisation Scheme

Launched by the Department for Business, Energy & Industrial Strategy (BEIS), the Public Sector Decarbonisation Scheme is a £1bn fund designed to encourage green growth across the public sector and affiliated bodies. The scheme, which kicked off in October, aims to help eligible organisations align with the UK’s Net Zero carbon targets and deliver significant carbon savings in the public sector. It also aims to promote economic activity during these difficult times.

Funding for the scheme is delivered through Salix Finance, which has a long history of supporting public sector organisations financially on energy efficiency and carbon reduction projects.

Applicants for the fund must operate within the public sector; the scheme is not designed to support businesses in the private sector. Examples of potential applicants include government departments, Local Authorities, further and higher education institutions and NHS Trusts.

How Does the Scheme Work?

Eligible bodies make their application for funding to Salix Finance for review and consideration, with the overriding project concept being focused on carbon reduction as the primary driver.

There’s also a keen focus on project management and deliverability – and Salix will have strong oversight on projects from beginning to end, judging them against the technical case for implementation, financial viability, and the levels of governance in place throughout project delivery.

Carbon and cost savings generated through funded projects need to be directly beneficial to the public sector body itself.

There is a list of eligible technologies which are fundable through the grant, and these are largely broken down into four categories:

  • Technologies that have a direct heat decarbonisation impact, such as air source heat pumps and ground source heat pumps.
  • Technologies that have a direct energy demand reduction impact, which will therefore facilitate further decarbonisation. This includes upgrades to building management systems, improvements to heat systems, HVAC system enhancements, and improvements to building fabric through improved insulation.
  • Technologies which in themselves facilitate downstream heat decarbonisation, such as improved metering or battery storage.
  • Direct replacements for coal and fuel heating systems.

When is the Deadline?

The fund is still open, but organisations have a very tight timescale to apply and secure funding. The final applications need to go in by the 11th of January 2021. Additionally, projects must finish in March 2021, with some limited discretion to extend this to the 30th of September 2021 at the very latest.

Salix will judge the projects and preferentially consider those that finish earlier. So, simply put, the faster you deliver the project the more likely you are to secure funding.

How can ETS help?

ETS has extensive experience in identifying, scoping and delivering HVAC upgrades, building services upgrades, and metering and controls improvements – and we’re in a strong position to help public sector bodies and affiliated organisations who are applying for monies under the Public Sector Decarbonisation Scheme in a turnkey manner: from project scoping, through application, to delivery and validation.

If you have a project that you need support with, or are keen to understand more how we can support you to capitalise on the funding available, please get in touch.

You can contact us by calling 0117 205 0542 or drop us an email at

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