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In this blog, we explore what PSDS funding is, who it benefits and how best to secure funding in the future.

*Article Updated 13th July 2022*

The Public Sector Decarbonisation Scheme (PSDS) is a government-backed scheme that looks to aim to help public sector bodies to lower their carbon footprint and reach their Net Zero goals. But how? Keep reading to find out more.

Firstly, what is PSDS and when did it launch?

Phase One of the Public Sector Decarbonisation Scheme (PSDS) launched in autumn 2020 as part of the government’s ‘Build Back Greener’ campaign

What is the scheme designed to do and what are its benefits?

The scheme set out to replace old, fossil-fuel technologies with more efficient, low or zero carbon technologies within public sector buildings.

The overarching benefit of PSDS is a low carbon future for the public sector. In practice, a local authority or school may want to replace their old heating system with a newer, more efficient technology, such as heat pumps or district heating connections.

This is where the PSDS funding comes in.

How many phases has there been and will there be anymore?

There have been three phases of PSDS so far, with the latest round, Phase 3c announced on 12th July 2023. You’re not currently able to apply for funding for past phases.

All three phases have had their funding allocations met by applicants, seeing a total of £2.5billion granted to public sector bodies since Sept 2020.

For a bit of context:

Phase One was part of the Government’s ‘Build Back Greener’ campaign to get the reignite the economy and had £1 billion of funding for a multitude of green projects.

Phase Two’s funding pot was significantly smaller – at just £75 million – and was aimed at taking a ‘whole building’ approach to heat decarbonisation.

Phase Three’s pot then jumped back up to £1.425 billion, but that number was broken down in to short-, medium- and long-term projects, of which 85% of that total was aimed at those taking the shortest time.

Phase Three also requires that the public body receiving PSDS funding part funds projects using their own finance. For example; if a Council wants to replace end of life gas boilers with heat pumps then the Council would need to find funds equivalent to the cost of replacing the boilers on a like for like basis with new gas boilers, while PSDS funds the additional costs of heat pumps rather than gas boilers.

As you can see, the criteria for PSDS funding are changing with every phase.

The latest news on Phase 3c

Salix Finance announced the new phase of funding with applications opening in the autumn of 2023 (exact date TBC) on 12th July 2023 and what we know so far is that Phase 3c has up to £230 million available in 2024/25. To find out more about application and guidance please visit their website here.

Is there anything LASER could do to help you with applying for funding?

Yes, there is.

Our team know the bidding process well, and can guide you through all the important parts of the process.

We’ll be delving in to how to best plan for any upcoming PSDS phases in our next blog, so be sure to check that out when it lands.

Would you like to find out more about PSDS funding and we can help?

If you would like to find out more about PSDS funding or our net-zero solutions, you can view more information here or alternatively contact our LASER team using the button below.

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