Scotland’s Public Sector Heat Decarbonisation Fund

The purpose of Scotland's Public Sector Heat Decarbonisation Fund (‘The Fund’) is to stimulate and accelerate the delivery of heat decarbonisation projects for Scottish local authorities, universities, and arms-length external organisations. Grant funding can be used for projects that work towards these aims providing that they adhere to Salix’s eligible criteria list.

A minimum 20% contribution is required from applicants, with the remainder eligible for grant funding from The Fund. The grant contribution from Salix must be used towards capital costs, including financial costs incurred for: the purchase of physical assets; costs of project build, installation, construction and commissioning; project management support for the capital project (e.g. external consultancy and management fees); enabling and ancillary works where these are directly linked to the core zero direct emissions heating system/ capital asset being installed; non-reclaimable VAT for eligible capital costs.

The 20% client contribution can be used for enabling works such as Distribution Network Operator costs. Please note that even if Distribution Network Operator costs are not a factor in the application, this 20% applicant contribution must still be provided towards the total grant amount. The following are not eligible to be funded through the grant:

• Existing employee costs
• Costs previously incurred prior to the agreed project start date
• Costs associated with legislative planning requirements
• Contingency - some additional funding may be considered on submission of a change request (subject to availability and evidence of need)

The Application Portal will be accessed through Scotland’s Public Sector Heat Decarbonisation Fund page on the Salix website. The opening date of the Application Portal will be communicated by Salix in due course. Applicants must submit a completed Application Form alongside the required supporting information. Applicants are encouraged to provide as detailed and relevant answers as possible to all questions as this will aid their application during the assessment process.

Applicants are required to have registered an account with Salix before they can submit their application. Please follow the link to register an account, if you don’t have one already.

Applicants will be able to submit a maximum of one application for either a Concept or Detailed Application in this funding round. The Application stage selected upon submission is final, and we strongly advise to closely consider the projects alignment with the Concept or Detailed Application criteria.

No - consultants can assist with an application but cannot apply on behalf of a public sector organisation. The application must be authorised and managed by the appropriate responsible officer at the public sector organisation applying for the scheme.

There is no minimum grant value per application, but the maximum value an applicant can apply for is £2.5 million for each organisation. The funding value for the financial year 2024-20245 will not be confirmed until late 2023/early 2024.

There will be a variety of organisations applying which may be at different stages of their journey to decarbonise; therefore, we understand that in some cases, there are various ways to evidence an answer sufficiently. It is advised to read all the sub-questions that are listed under each main question as these have been included as guides to submitting the best possible answer. Answers that provide a comprehensive and relevant response to the sub-questions are more likely to fulfil the requirements of the main question.

Robust and fully evidenced applications are more likely to score higher during the assessment. If the application meets certain criteria but the evidence provided is insufficient, the technical assessors will reach out directly to the main contact who submitted the application with queries; please ensure that these queries are answered within three working days.

Not necessarily - in this instance, Salix would discuss with the applicant whether they will amend the scope of the application or whether they would like to withdraw from the process. If there are any questions over the eligibility of certain buildings within a single application, please contact the team at [email protected]

Yes – feedback will be sent to all unsuccessful applicants which can be used to improve applications for any future schemes and funding streams that become available. This feedback will be provided once all applications have been assessed and the results have been finalised.

The eligible grant value is determined by calculating 80% of the total value of the project, up to a value of £2.5million. Applicants must contribute 20% of the total eligible project costs. The eligible grant value is calculated in ‘Step 4 – Support Tool’ in the Application Form.

Successful Concept applicants will be required to have monthly meetings with a Salix representative to discuss progress on their Detailed Application. Whilst there will not be the opportunity for full feedback on the application in advance of the final submission date, queries will be answered by both the Energy & Carbon team and the Salix Delivery Team.

All applications submitted in this funding call will be assessed. In both the assessment of applications and allocation of funds Detailed Applications will be considered first. Depending on the remaining funding available, Concept Applications will then be considered.

Detailed Applications will undergo a single assessment approach. A full technical assessment will be undertaken, pending an initial quality check that will ensure completeness.

Concept Applications will require a two-stage assessment approach. The first stage will be to assess the Concept project, and if successful the application will progress. Applicants with a Concept project will then be required to develop and submit a Detailed Application to Salix no later than 19 May 2024. The second assessment stage will be performed upon submission of the final Detailed Application where a full technical assessment will be conducted.

Any value over 20% would not impact the outcome, as the minimum 20% client contribution is a requirement and not assessed. We will ask for evidence if we are unsure about anything related to the 20% contribution.

To clarify around the subject of the Detailed Application idea, this is not equal to detailed designs. At this point, you may have conducted some feasibility work if you already have contractors on frameworks and you can add variations.

Detailed Applications will take priority over Concept Applications with the reason being so we can prioritise projects that are further down the line and are more developed therefore will utilise funds and deliver the project sooner, subsequently allowing us to also see the savings as well.

This will count as non-domestic if it is part of the university’s estate, and therefore eligible. Building eligibility is also subjected to their potential leases, and these will be assessed on a case-by-case basis.

No, it will not be permissible to include costs incurred between the date of application and the date of grant award. From the date of application, any costs incurred are not eligible. Only costs incurred from the date the Grant Offer Letter is issued are eligible. A Grant Offer Letter will be issued following successful assessment of a detailed application.

It is not possible to submit both Detailed and Concept Applications for different projects. We can only accept one application per public body, and this would have to be either Concept or Detailed.

Lighting cannot be part of the application and cannot therefore be funded. If lighting makes sense to be included as part of a wider project, it can perhaps be done as part of that. However, it cannot be done as part of the application, and energy savings that have come from LED installations would not be included in the application form and no capital should be included in the application form as well.

If the entire project is dependent on the funding, then this is fine. However, if you have funding already agreed for the project, then this would be counted as additionality. Anything included in your application cannot be started on site before you receive your Grant Offer Letter. Any costs or invoices dated before the date of your Grant Offer Letter, will not be eligible when submitted as part of the payment request.

This is the pilot scheme and we do not have any future checkpoints designated yet.

As per Section 3.3 of the Guidance Notes, connection to an existing heat network is eligible if the applicant can demonstrate that the network has a clear decarbonisation plan in place no later than 2038.

The 20% client contribution is a financial contribution.

Yes. There is no limit to the number of buildings you can include in your application, you can bundle as many into one application as you would like.

Yes, an Arm’s Length External Organisation and a local authority can submit separate bids.

The deadline is firm and there is no flexibility on financial year spend; for spend committed to the financial year 2023/24 this must be fully spent by 31 March 2024; for spend committed to the financial year 2024/25 the grant end date is 31 March 2025. We will provide payment guidance in due course. Yes, the same deadline applies for accepted Concept Applications.

Most buildings will have this already. However, if yours does not you can get around this by providing evidence of the building energy performance by square metering and energy usage in place.

Methodologies should be standard relating to heat loss and standardised by industry. Everything needs to be evidenced, and we expect to see this evidence in the application and will look for it during assessment.

The allocated funding for the 23/24 financial year is £20m, and once the budget for Scotland has been agreed (likely by early next year), further information on this will be shared. It is every intention of the Scottish Government to continue to offer funding for this purpose under similar schemes.

For Concept Applications, we do appreciate that you won’t have firm costs and expect these to change prior to submitting your Detailed Application. If confirmed, we will stay in close contact with you as you prepare your detailed application and can look, within reason, to confirm any adjustments required to funding prior to issuing a Grant Offer Letter. However, if costs increase there are no guarantees this can be supplemented through this fund.

Yes. When you are looking at the Application Form, sheets in purple are required for both Detailed and Concept Applications, and green sheets are only necessary for detailed applications. Please see section 7.1.2 of the guidance document for the specific sections of the Application Form required for Concept Applications.

Eligible public bodies that have a long-term lease arrangement for a building(s) from another public body (e.g. local government), in which the lease contract allows cost savings through improved energy efficiency to be passed to the eligible public body, are eligible to apply. If you are unclear regarding the eligibility of a building, please contact [email protected]

Assessment is weighted so we can see the feasibility of elements come together. Each section receives a score from 0-4; this is detailed further in the guidance documentation. Your application will be given an overall score and there is a passing threshold to reach. We will go from the top down with passing applications to allocate funds, with detailed applications taking priority as they are more likely to move forward quickly.

Yes, but it needs to meet the criteria. It can only apply to new projects, not projects already underway. There are multiple funding sources available from the Scottish Government, with the idea that they all work together to make things happen. Depending on what the project is, it is possible to utilise multiple options together. Please get in touch with Salix or the Scottish Government if you have questions.
 

 

This scheme is based on a fabric-first approach to look at reducing heat load prior to upgrading heat networks. Whilst you could apply, you would clearly need to show the reasoning behind this decision, including a forward look and forecasting. If you have already completed fabric-first updates, there is space on the form for you to say what you have already done to address this.

The application clearly indicates what supporting documents are mandatory and which are desirable. This is also different if you are submitting a Concept Application or a Detailed Application, so it all depends on the type of application you are submitting, and the status of the document. If you don’t think it is possible to include something then yes, please do add commentary to explain why.

Anything associated with managing the project for capital assets is eligible for funding, including project management. Please refer to section 3 of the guidance documents and do remember that any work undertaken prior to the issue of the Grant Offer Letter is not eligible.

Public sector bodies can use internal resource and expertise to conduct the necessary surveys and studies. If organisations do not have the internal resource or expertise to conduct the necessary preliminary surveys or studies to identify or develop projects, external consultants can be contracted to assist following the organisations own internal procurement frameworks.

The eligibility of buildings currently under long-term leases will be considered on a case-by-case basis, subject to discussion between Salix and the applicant prior to the submission of their application.