Phase 3c Public Sector Decarbonisation Scheme

Eligible organisations are able to apply for grant funding for projects which meet the below compliance criteria:

1. Applicants must have and be using a fossil-fuelled heating plant.
2. The heating plant in question must be coming to the end of its useful life and must be decommissioned and/or removed in full once the carbon heating plant becomes operational.
3. Applications must include a new low carbon heating plant in 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.
4. Applicants can include fabric improvements and energy efficiency measures where they reduce the heat or electrical demand of the building being heated by the proposed low carbon heating plant (i.e., insulation, double glazing, LEDs and solar panels). These measures funded through the Public Sector Decarbonisation Scheme will be capped at 58% of the grant value.
5. The funding provided to save a tonne of direct carbon (tCO2e) over the lifetime of the project must be no more than £325 (the Carbon Cost Threshold (CCT)), which is automatically calculated by the Support Tool in the Grant Application Form.
6. Just as for Phase 3b of the Public Sector Decarbonisation Scheme, Phase 3c Public Sector Decarbonisation Scheme is primarily for capital works, however external consultancy and management fees may be included. Existing employee costs or any costs previously incurred cannot be included.
7. 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).
8. There is no cap on the amount of funding that Applicants can apply for. However as previously referenced, Applicants must demonstrate that they can deliver within the funding timescales and meet client contribution.
9. 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.
10. 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.
11. All projects must be complete by 31 March 2026. Funding is not available for projects that cannot deliver to this timeframe, and projects which do not complete before these completion dates will be liable for any project costs incurred after this date.

Measures to reduce high electrical consumption can also be included, but only carbon savings from the measures related to direct onsite emissions will count toward carbon compliance criteria. Building fabric improvements and energy efficiency measures can only be installed where they reduce the heat or electrical demand of the building being heated by the proposed low carbon heating plant.

The Salix Phase 3c Public Sector Decarbonisation Scheme Application Form will calculate the eligible grant value under these criteria and can be downloaded below.

Applicants are expected to take a ‘whole building’ approach to decarbonising their heating. This is where all the factors that contribute to a building’s energy consumption are considered holistically to determine the most cost-effective way to achieve the objective. Applications will be assessed against how effectively the total energy use of a building has been considered when selecting measures to be installed.

For example:

• Investment in improving the thermal performance of the building fabric will reduce the overall size of the low carbon heating plant required, as well as save on fuel bills and increase thermal comfort for occupants.
• Investment in reducing the electricity consumption, such as through installation of more energy efficient lighting, can reduce the need to upgrade a building’s electrical infrastructure to accommodate the installation of a heat pump (See Guidance, Appendix 1, for eligible technologies).

Eligible measures are split into four distinct areas and a list can be found in the Guidance Notes in Section 4.2.