Salix PSDS for Schools | What MATs Do After 2024 Closure

The Public Sector Decarbonisation Scheme Phase 4 has £530 million allocated through 2028, and schools and FE colleges are among the priority sectors. For multi-academy trusts especially, this is the most generous funding window since the original Carbon and Energy Fund — fully grant-funded retrofits with no debt, no PFI structure, no rate-payer call. But Phase 4 is competitive, scored, and rewards integrated planning over opportunistic single-measure bids. This post sets out what wins.

Phase 4 in numbers

£530m allocated. Expected to deliver across roughly 800–1,200 projects depending on average bid size. Per-applicant cap of £25m. Typical winning school project sizes of £1m to £6m. Applications run in roughly quarterly windows with the next major window expected late 2026.

Eligible applicants include state-funded schools, academies (single-school and multi-academy trusts), FE colleges, sixth-form colleges, NHS trusts, local authorities, central government departments and emergency services. Universities are mostly outside (separate routes via Research England Wave 2). Independent schools, charities and housing associations are not eligible.

Why solar-only bids don’t win

Phase 4 scoring rewards carbon savings per pound of grant. Solar PV alone, in a school context, typically scores 4.0 to 5.5 tCO2e/£100k of grant — below the Phase 4 winning threshold of around 6.5. The reason is straightforward: schools have moderate electricity demand relative to roof area, with significant export ratios because operations are limited to weekday daytime and school holidays. The carbon saving per pound is therefore lower than other PSDS-eligible measures.

Heat pump retrofits, by contrast, typically score 8.0 to 12.0 tCO2e/£100k because they displace gas at an effective high carbon factor and the gas demand in a typical school is substantial. Solar plus heat pump plus fabric upgrades typically scores 7.0 to 9.0 — comfortably above the winning threshold.

We have audited a number of solar-only PSDS bids submitted by other consultants. None of them have won Phase 4 funding. Every winning Phase 4 school bid we are aware of has been an integrated retrofit.

The Heat Decarbonisation Plan

The Heat Decarbonisation Plan (HDP) is the single most important document in a PSDS bid. The HDP is a structured assessment of how a school estate will move off fossil heat over the next decade. It is not a marketing document; it is technical.

A credible HDP includes:

• Stage 4 RIBA-equivalent surveys of every building in scope. This means measured surveys, condition assessments, and detailed plant and emitter inspection.
• Hour-by-hour space heat and DHW demand modelling. We use IES VE for this work but other building energy modelling software is acceptable. The output is a heat load profile by zone and by hour.
• Temperature regime analysis for every emitter circuit. Heat pumps need flow temperatures below 55°C for efficient operation. Many older school radiator circuits run at 70–80°C and require either oversizing of emitters or supplementary heating to be heat-pump-ready.
• Heat pump sizing, plant room space studies, and electrical capacity assessment. Air source heat pumps need substantial outdoor space; ground source needs land. Each option has different implications.
• Phasing plan tied to a 10-year capex schedule. Phase 4 might fund only some of the trajectory; the HDP needs to show the route to net zero overall.
• Assumed energy prices, carbon prices and discount rates aligned to HM Treasury Green Book. Inconsistent assumptions are a common scoring weakness.

Without a credible HDP, your bid will be marked “non-compliant” before scoring. With a strong HDP, your bid sits in the top quartile.

The Low Carbon Skills Fund route

Salix Finance also operates the Low Carbon Skills Fund (LCSF), which funds the development of HDPs themselves. LCSF awards typically run £25,000 to £80,000 per estate. Schools and trusts that don’t yet have an HDP should be applying to the next LCSF window before applying to PSDS.

LCSF scoring is much less competitive than PSDS — most submitted applications win. The LCSF is designed to build the pipeline of credible PSDS-ready applicants.

The sequencing for trusts new to PSDS is therefore:

1. LCSF round 1 — fund the HDP work
2. Develop the HDP over 4 to 8 weeks
3. Submit PSDS application using the completed HDP

Total elapsed time from kickoff to PSDS submission: 6 to 9 months.

MAT-level vs single-school bids

For multi-academy trusts, the question is whether to submit one consolidated bid covering multiple schools or separate bids per school. Our experience: consolidated bids almost always win more, faster, with less effort.

A consolidated bid:

• Can range across schools at different decarbonisation stages — the carbon scoring averages across the bid, so weaker schools can be carried by stronger ones
• Spreads the application overhead across multiple sites (lower cost per project)
• Demonstrates a strategic approach that scores better than fragmented single-school bids
• Allows easier prioritisation if Salix asks you to scale back the bid in clarification — you can deprioritise weaker schools rather than abandoning the whole bid

The downside is technical complexity — you are doing five HDPs at once. We have run trust-wide bids for trusts of 4 to 14 schools.

What the integrated bundle looks like

A typical winning Phase 4 school bid bundles the following measures:

• Solar PV: 80–350 kWp depending on roof and school size
• Air-source heat pumps: replacing gas boilers, with hydronic retrofit
• Fabric upgrades: cavity wall insulation, loft top-up, secondary glazing, draught-proofing
• Building Management System (BMS) upgrade: for occupancy-driven heating control
• LED lighting with controls
• Pipework and emitter upgrades: needed to make heat pumps viable

The relative weights of these measures vary by school type. A 1970s system-built secondary school might need substantial fabric upgrades because the building envelope is poor. A 2010-built academy might need only minor BMS work. The HDP determines the right mix.

Procurement constraints

PSDS-funded work must be procured through a public-sector compliant route. The default frameworks are:

• ESPO MSTAR3 — for installation works. The most-used framework for PSDS school bids.
• Crown Commercial Service RM6168 (Estate Management) — for consultancy.
• NEPO 522 — for trusts in the North East.
• YPO Frameworks — for Yorkshire and the Humber.

These limit the installer pool but keep procurement clean. Most trusts run procurement through MSTAR3, which gives access to a panel of pre-qualified installers with framework-set rates. Direct procurement outside these frameworks is possible but adds substantial procurement risk to the bid.

What PSDS will not fund

Several measures are explicitly excluded from Phase 4:

• Battery storage that is not paired with electrification (heat pump or refrigeration)
• Hydrogen-ready boilers (Phase 4 has explicitly de-prioritised these)
• Combined heat and power (CHP) — explicitly de-prioritised in Phase 4
• Routine maintenance or asset replacement that would have happened anyway
• Energy measures where another grant has already paid (no double-funding)
• PFI-built schools where the PFI provider is responsible for energy infrastructure

The PFI exclusion catches a lot of trusts. Schools built under PFI in the early 2000s typically have 25-year PFI contracts where the PFI provider operates the energy infrastructure. PSDS will not normally fund measures on PFI assets where this is the case. Workarounds exist via the PFI provider applying with the trust’s support, but these are complex and need legal advice.

Typical school project numbers

For a single secondary school of around 12,000 m² with 950 pupils:

• Solar PV: 220 kWp — £155,000 capex
• Air-source heat pump system: 280 kW thermal — £420,000 capex
• Fabric upgrades: cavity wall + secondary glazing + draught — £140,000
• BMS upgrade: £45,000
• LED lighting + controls: £85,000
• Total project: £845,000

Carbon saving: 142 tCO2e/year. Carbon score: 16.8 tCO2e/£100k of grant — comfortably above the winning threshold.

A multi-academy trust of 6 schools doing similar packages would total roughly £4.5–6m of project value. That is well within the £25m Phase 4 cap and easily handled within a single bid.

Common bid mistakes

Skipping the HDP. By far the most common reason bids fail. A hastily-prepared HDP that doesn’t justify the carbon scoring is the #1 cause of non-compliance findings.

Over-claiming carbon savings. Assessors check carbon claims against published equipment performance data. Optimistic claims trigger clarification questions and reduce score.

Procurement non-compliance. Procuring outside an approved framework when an approved framework should have been used. Caught in clarification but adds risk.

Inadequate M&V plan. Phase 4 requires monitoring & verification commitments. Vague M&V plans reduce score.

Misaligned discount rates. Using a non-Green Book discount rate (the Green Book uses 3.5% for the social rate of time preference, with technical adjustments). Using 7% commercial rates produces lower NPV and weaker scoring.

Timing

The next major Phase 4 window is expected late 2026. Trusts that don’t yet have an HDP should be applying to the next LCSF window now, with a target of completing the HDP in time for the late-2026 PSDS window.

For trusts that already have an HDP, the bid drafting phase is typically 8 to 10 weeks before the window closes.

How we work with school clients

For PSDS work specifically, we use a success-fee model — typically 3% of the awarded grant, capped at £40,000 per bid. Most MATs prefer this because it aligns incentives and avoids a capex hit before grant. The HDP itself is normally either LCSF-funded (in which case we work to LCSF rates) or fixed-fee (typically £6,500 per school).

The fastest route in is the free funding review form. Tell us how many schools and the year ranges of the buildings; we’ll come back within one working day with an outline route to a credible Phase 4 bid.