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

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.

For the wider picture, including the tax relief private businesses can claim instead, see grant funding compared with a PPA.

Keep going

• REGO Certificates Under a PPA: Who Owns the Greenness?
• Solar PPA Pros and Cons for UK Businesses (2026)
• Virtual PPA vs On-site PPA: When Each Wins
• Adding Battery Storage to a Solar PPA
• How to RFP a Solar PPA — A Procurement Playbook
• Off-taker Covenant: How Your Credit Rating Affects Your PPA Tariff