Category: Public sector

PSDS Grant vs Solar PPA: Which for Public Sector?

Public Sector Decarbonisation Scheme funding vs PPA — which route suits NHS, schools, councils and universities better in 2026?

The decision facing UK public sector

Schools, NHS Trusts, councils and universities have two main routes to large-scale solar: PSDS funding or PPA. They're often mutually exclusive — but suit different situations.

PSDS at a glance

Public Sector Decarbonisation Scheme — Salix-administered grant funding for public sector decarbonisation. Funding typically 100% of capex (no match required for most schemes).

Pros: Lowest lifetime cost. Asset ownership.

Cons: Highly oversubscribed. Strict procurement under PCR 2015 / PA 2023. Implementation typically 18-30 months. Asset utilisation requirements (build must serve target site for 25 years).

PPA at a glance

Third-party financed solar with you buying the kWh. £0 capex.

Pros: Faster (6-12 months). No capex. Provider takes performance risk.

Cons: Higher lifetime cost. No asset ownership. Procurement still complex for crown bodies.

Decision framework

Scenario	Better route
PSDS round live + you can wait 24 months	PSDS
Site already excluded from PSDS	PPA
Need decarbonisation NOW for deadline	PPA
Capital available, 25-year occupancy	PSDS (or cash + AIA)
Site lease < 25 years	PPA (PSDS requires long tenure)
Multi-site MAT / NHS portfolio	PPA aggregated (PSDS site-by-site)

Can you stack them?

Generally no — PSDS funding excludes PPA structures. But you can split your estate: PSDS for some sites, PPA for others. Many MATs and Trusts now run portfolios this way.