Phase 4 Public Sector Decarbonisation Scheme - Project criteria

We would like to encourage organisations to read our Phase 4 Public Sector Decarbonisation Scheme Guidance Notes prior to applying. 

Organisations will be eligible to apply forPhase 4 of the Public Sector Decarbonisation Scheme where their application meets the below project criteria:

• Applicants must have and be using a fossil-fuelled heating plant or cremator.
• The heating plant in question must be coming to the end of its useful life (10+ years) and must be decommissioned and/or removed in full once the low carbon alternative becomes operational.  Bivalent systems are allowed, using the existing fossil fuel plant, however, no new fossil fuel heating plant will be funded. 
• Applications must include a new low carbon heating plant for each building included in the application. This new low carbon heating plant alongside the energy efficiency measures installed, must meet the heat demand of the original end of life fossil fuel heating plant. No additional measures will be funded without the replacement of a fossil fuel heating plant in the same building.
• Applicants can include fabric improvements and energy efficiency measures (i.e., insulation, double glazing, LEDs and solar panels) where they reduce the heat or electrical demand of the building being heated by the proposed low carbon heating plant. These energy efficiency measures are only eligible for Public Sector Decarbonisation Scheme funding if they are installed in a building served by a Public Sector Decarbonisation Scheme-funded low carbon heating source.
• Reasonable enabling works may be included in the application, provided they are directly linked to the core technologies being installed, and these will be reviewed for value for money (i.e., smart meters, electrical infrastructure upgrades and pipework extensions).
• Applicants must contribute the cost for a like-for-like replacement at a minimum of 12% of the total project costs. Like-for-like costs over 12% must still be contributed by the applicant in full. The contribution can come from grants, loans and other borrowing public sector functions.
• Phase 4 of the Public Sector Decarbonisation Scheme is primarily used for capital works, however external consultancy and management fees may be included. Existing employee costs or any costs previously incurred cannot be included.
• The maximum acceptable application grant carbon cost for Phase 4 is £510/tCO2e over the lifetime of the project for grant funded measures. As Phase 4 will no longer be allocated on a first come first served basis, and instead will use targeted allocation. Applications will be prioritised on the applications’ grant carbon cost, meaning that applications with higher grant carbon costs may be less likely to receive funding.  Applicants are therefore encouraged to submit applications with a competitive grant carbon cost, whilst ensuring they can meet the minimum recipient contribution requirements to deliver the project.
• Applicants must either own the building that the funding is being used to upgrade or have a long-term lease arrangement where the tenancy agreement places the responsibility for the operation and maintenance of the building services on the applicant. Buildings under leasehold agreements cannot hold a potential for commercial gain. All relevant information regarding lease agreements must be reflected on the application form.
• Buildings under Private Finance Initiative (PFI) contracts are considered as public sector owned if the ownership of the building freehold transfers to the public sector at contract expiry. Any costs related to this transfer must not be impacted by the decarbonisation works. Any Private Finance Initiative without this agreement will be considered privately owned but publicly leased.
• Salix may award grants for projects undertaken jointly by two or more recipients. These are known as consortium bids. All members of the consortia must comply with the eligibility criteria outlined in this section and all consortium information must be provided at application, within the consortium documentation tab in the application form.
• Salix may also award grants to recipients in respect of more than one project. If the same project is applied for more than once, with different grant carbon costs, this will cause all applications associated with this project to be rejected. Any applications that are found to be duplicates will not pass the initial assessment and will be withdrawn by Salix.
• All projects must be complete by 31 March 2028. Funding is not available for projects that cannot deliver within this timeframe. Projects which do not complete before their forecasted financial year completion dates at the time of application will be liable for any project costs incurred after this date.  Once applications have been submitted, applicants will not be able to amend the funding profiles for their project. As such applicants are encouraged to pick the funding profile that best matches the projects resources and programme. It will be at Salix’s discretion to approve any changes to this profile during assessment period. The below table details the funding profiles that are accepted as per our Phase 4 Public Sector Decarbonisation Scheme Guidance Notes.