Phase 3c Public Sector Decarbonisation Scheme

The Public Sector Decarbonisation Scheme provides grants for public sector bodies to fund
heat decarbonisation and energy efficiency measures.

An additional financial year of funding has been granted for Phase 3c. Up to £230m will be allocated to projects taking place in 2024/25, with an additional budget for financial year 2025/26. 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.

Salix Finance expects to be able to inform all phase 3c applicants as to whether their application has been successful by 26 April 2024.

Guidance documents and further information can be found on the Salix Finance website.

The solution for you

Heat decarbonisation in the built environment

At Mitsubishi Electric we have been working on and championing innovative solutions that help to reduce carbon emissions from the built environment for decades.

Our expertise and pivotal technology has enabled us to develop renewable heating solutions that can address decarbonisation head-on. Our range of commercial Ecodan, e-series and Climaveneta air source heat pumps can lower running costs and reduce carbon footprints.


Find out more about low carbon heating solutions here
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A focus on low carbon and renewable heating

Phase 3c PSDS continues its task to reduce fossil fuels as well as making public buildings more comfortable and more efficient to warm. This is particularly important as we know most public sector buildings still rely on fossil fuels for heating and hot water.

Salix has seen great successes with the PSDS, and Phase 3c will build on previous phases with refinements to ultimately help applicants on their journey to Net Zero.

Salix funding phase 3c
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Who can apply?

Public sector bodies that are contracting authorities in England are eligible to apply for Phase 3c of the PSDS. These include.

  • Central government departments and their arm’s length bodies (set out in Public Bodies as published by the Cabinet Office, see here). 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
  • Emergency services
  • Institutions of further and higher education
  • Local authorities
  • Maintained schools within the state education system, including academies, Multi-Academy Trusts, and free schools
  • Nursery schools maintained by a local authority
  • NHS Trusts and Foundation Trusts

Public Corporations and private sector organisations are not eligible to apply for funding through the scheme. Registered charities are not eligible, unless they are also non-departmental public bodies as defined by the Cabinet Office. Social housing is also excluded.

What are the Phase 3 PSDS main eligible measures?

As Phase 3 is focused on heat decarbonisation, the installation of fossil fuel measures through this scheme is not available. Funding is provided for costs over and above the like for replacement costs of a fossil fuel heating system.

Eligible Projects

Eligible projects are those undertaken in England, by the Applicant, involving the installation of heat decarbonisation and energy efficiency measures. There are a number of requirements and please see our Guidance Notes here for full information.

Applicants must also demonstrate how they are obtaining value for money, as part of the application process. The carbon cost threshold provides good guidance on costs.