Salix Funding Explained
Salix is a government-owned organisation that delivers funding schemes to help the public sector reduce their carbon emissions, in line with the UK’s 2050 net zero target.
Since its formation in 2004, Salix has helped public sector organisations commit to more than 21,500 projects by administering £2.7 billion of funding, with projects saving 1.1 million tonnes of carbon dioxide annually.
Various tranches of funding are available through Salix for energy efficiency and decarbonisation improvements, with differing criteria, depending on the type of organisation and where you are in Britain. Here’s our quick guide to the schemes that are live, as of October 2023.
Public Sector Decarbonisation Scheme (PSDS) – England
The Public Sector Decarbonisation Scheme (PSDS) provides grants for public sector bodies in England to fund heat decarbonisation and energy efficiency measures. Most of the buildings in the public sector still rely on burning fossil fuels for heating, hot water, and catering – so this is an area of huge untapped potential.
We are currently in Phase 3c of the scheme, which has been granted an additional financial year of funding. This increases the value of the overall funding to the scheme and will enable Phase 3c projects to deliver across two financial years.
Applicants can submit separate applications for separate projects or combine several projects for delivery across one or two financial years.
Phase 3c has up to £230 million available in 2024/25. The budget available in 2025/26 will be confirmed this autumn though applicants should assume a broadly balanced profile across 2024/25 and 2025/26.
The application portal for Phase 3c opened on Tuesday 10 October, 2pm.
For more information, visit our PSDS guide.
Scotland’s Public Sector Heat Decarbonisation Fund
The Scottish Government has made £20 million grant funding available within this financial year under Scotland’s Public Sector Heat Decarbonisation Fund which will be delivered by Salix.
The Fund is aimed at helping the public sector decarbonise their heating systems by replacing them with zero direct emissions systems, as well as for retrofit energy efficiency measures to support the overall decarbonisation of heat in buildings.
The fund allows for applicants to apply for single or multi-year funding to support the delivery of their heat decarbonisation and/or energy efficiency project(s).
Eligible bodies include arm’s length external organisations (ALEOs), local authorities and universities.
As of September 2023, additional information such as Guidance Notes and the application process are yet to be published.
Read more about Scotland’s Public Sector Heat Decarbonisation Fund.
Scottish Public Sector Energy Efficiency Loan Scheme
The Scottish SEELS Loan Programme offers zero interest loans to the public sector to enable them to undertake energy efficiency improvement projects. Funded by the Scottish Government, the available funding allows Salix to offer up to 75% of the total compliant project value along with increased payback criteria (subject to technical review and due diligence).
Project criteria in Scotland offer up to a 12-year payback at a cost of £305 per tonne of carbon dioxide (£305/tCO2) over the lifetime of the project on all new loan agreements.
More information is on the Salix website.
The Scotland Recycling Fund
The Salix Recycling Fund, as part of the Scottish Public Sector Loan Scheme, is a ring-fenced fund held by the eligible public sector body, created with capital provided by Scottish Government through Salix, and equally matched by the public sector body.
The scheme aims to increase long-term investment in energy efficient technologies across the public sector. Over 100 technologies are eligible including lighting, heating, and insulation.
The Salix contribution is a long-term 100% interest-free repayable grant. Scottish local authorities can use their former Central Energy Efficiency Fund or their own capital as their match contribution. The financial savings achieved by the projects are reinvested in further eligible projects year on year, hence the term ‘Recycling Fund’.
Up to 25% of annual energy savings can be kept as immediate savings, with 75% ring fenced in the fund.
Project compliance criteria of up to a 12-year payback at a cost of £305 per tonne of carbon dioxide saved.
Read more about the Scotland Recycling Fund.
The Wales Funding Programme
The Wales Funding Programme allows public sector bodies to apply for interest-free loans for up to 100% of the costs of energy-saving or renewable energy projects.
It combines both the Salix Energy Efficiency Loan Scheme, which focuses on funding energy efficiency projects, and the Invest to Save finance scheme which focuses on funding energy efficiency and renewable technologies.
Funding is available for projects that are at a well-defined stage.
Read more about the Wales Funding Programme.
How Concept can help
At Concept we have successfully supported many organisations with Salix-funded projects.
We can help you identify the best energy efficiency and carbon reduction measures, ahead of future funding rounds. We’ve conducted energy surveys for many public sector organisations across the UK, and will help you identify the solutions that deliver the best cost and carbon reduction outcomes, as well as well as a list of measures that meet Salix criteria.
Get in touch for advice, or if you’d like to learn more.