£75 million available in public sector funding for decarbonisation schemes

On 17th March 2021, Salix Finance announced that Phase 2 of the Public Sector Decarbonisation Scheme (Phase 2 PSDS) will be delivered in 2021-22. The government has allocated £75 million of funding and this is available to eligible organisations as grants.

 It will have a stronger focus on heat decarbonisation than Phase 1 in order to deliver greater carbon emission reductions to help meet the UK’s Net Zero 2050 targets. Phase 2 PSDS will support the public sector in taking a ‘whole building’ approach when decarbonising their estates.

 Phase 2 PSDS opens to applications at 14:00 on 7 April 2021. It will close when sufficient high-quality applications have been submitted, with all successful projects needing to be complete by 31 March 2022.

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, such as our range of commercial Ecodan air source heat pumps that can lower running costs and reduce carbon footprints.


Find out more about low carbon heating solutions here
mitsubishi electric decarbonisation scheme advice

A focus on low carbon and renewable heating

The purpose of Phase 2 PSDS is to help Public Sector organisations to decarbonise their building infrastructure. As mentioned previously, the second phase of this scheme is aimed at taking a ‘whole building’ approach to heat decarbonisation.

One of the biggest challenges meeting net zero by 2050 in the UK is decarbonising the way buildings are heated. In fact, most public sector buildings still rely on fossil fuel based heating, and as these systems approach the end of their life, Phase 2 PSDS presents the ideal opportunity to transition to low carbon heating.


Find out more about the scheme here Watch our Public Sector Decarbonisation Fund video
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Who can apply?

The organisations eligible to apply for the Grant Scheme are the same as for Phase 1 PSDS. These include:

  • Central government departments and their non-departmental government bodies (set out in Public Bodies1 as published by the Cabinet Office)
  • For central government departments where their roles are reserved (i.e. not devolved to Scottish, Welsh and Northern Irish Governments) 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
  • Non-departmental public bodies

Schools funded by charities, private schools, private colleges and private universities are not eligible to apply. Phase 2 PSDS will offer grants of up to a maximum of £5m per application for projects that reduce non-traded emissions. There is no minimum sum.

Can I apply if I was funded in Phase 1?

According to Salix Finance, there is no restriction in applying to Phase 2 PSDS if you were successfully funded in Phase 1. However, all funded Phase 1 projects must continue to meet their deadlines.

Eligible technologies

Examples of eligible technologies can be found in this list provided by BEIS. As Phase 2 PSDS is focused on heat decarbonisation, funding for fossil-fuelled heating is excluded from the scheme, this included gas replacement boilers and combined heat and power technologies that run even partially on fossil fuels. 

 Eligible technologies have been split into 3 project types. As an innovative manufacturer of low carbon heating, energy-efficient chillers and ventilation technologies, our product ranges fall within all 3 project types. These categories are described like so:

Low carbon heating; technologies that directly contribute to the heat decarbonisation of a building by the installation of low carbon heating. For example, air, water and ground source heat pumps and connections to low carbon heat networks.

Find out more about our commercial heating range

Cooling systems; this includes energy-efficient chillers as well as plant replacement/upgrade of cooling systems.

Find out more about our chiller range

Ventilation systems; this includes ventilation distribution and air handling units.

Find out more about our ventilation systems

How can Mitsubishi Electric help you?

At Mitsubishi Electric we are committed to being a leading voice within the push to decarbonise heating and cooling in the built environment. We understand that Phase 2 PSDS offers a very real chance to bring projects forward that can make a tangible difference. As such, we have appointed Kevin Pocock, one of our Business Development Managers to head up our response to this grant scheme. Kevin brings a wealth of experience and knowledge to this role, having been our principal point of contact for Education and Public Sector clients for many years.

If you would like any further information please do not hesitate to contact Kevin Pocock directly via email or connect with him on LinkedIn. He will be happy to discuss your project and what Mitsubishi Electric can do to help you achieve your funding goals.

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Mitsubishi Electric is a world-leading supplier of energy efficient equipment that will cool, heat, ventilate and control buildings.

We supply not only the equipment but continued support throughout the lifecycle of all products whether that is in commercial and industrial properties or homes.


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Mitsubishi Electric has a vast product range that includes VRF air conditioning and chillers. Our Product Catalogue has our complete range of current products, including technical specification, so for more information please download this.

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Or if you would like a simple overview of our product range and suitable applications, please download our Product Application infographic.

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Mitsubishi Electric offers solutions that deliver the quality and excellence you would expect from a world-leading supplier. We can support you every step of the way whether pre-sales design and specification, installation and commissioning, or service and maintenance, right through to recycling.

For domestic heating service and maintenance, download our brochure below.

For commercial service and maintenance support download our brochure below, use the enquiry form on the right, or contact: 

London and the South: Telephone: 01707 278683
Email: melsmartservicelondon@meuk.mee.com

Midlands and Wales: Telephone: 0121 607 2375
Email: melsmartservicebirmingham@meuk.mee.com

North England and North Wales: Telephone: 0161 866 6070
Email: melsmartservicemanchester@meuk.mee.com

Scotland: Telephone: 01786 450348
Email: melsmartservicestirling@meuk.mee.com

National Spares: 0161 866 6089 (option 2)

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