Salix PSDS and LCSF in 2026 — what's still open, what closed, what to do next.

The Salix landscape in 2026 — three active programmes

1. Salix interest-free loans (BAU)

Salix's longest-running programme — public-sector interest-free loans for energy efficiency and decarbonisation projects, repaid from the energy savings the project generates. Active continuously since 2004. See the full Salix Finance solar guide for loan terms, worked examples and application requirements. Typical loan amounts £100k–£3m per project, typical loan terms 5–8 years. Eligible: NHS trusts, councils (district, county, unitary, combined authorities), state-funded schools, academies, FE colleges, central government, fire and police services, emergency services, social housing through specific routes.

Practical effect: zero net cost over the loan life. The energy savings the solar generates (plus any heat measures, BMS upgrades, lighting controls etc.) cover the loan repayments. Once the loan is repaid, the savings continue to accrue to the public body for the remaining 15–20 years of the asset life. For most schools, NHS trusts and councils that missed the PSDS Phase 4 window, this is the obvious next step.

2. Low Carbon Skills Fund (LCSF)

Funds the strategic decarbonisation work — Heat Decarbonisation Plans, estate-wide energy audits, technical feasibility, governance frameworks. Typical awards £25k–£80k per estate. Active in 2026 with regular call windows. The fund's purpose is to keep public sector bodies "scoping ready" so they can move quickly when capital funding (whether a future PSDS, Salix BAU loans, or other) becomes available.

Critically: LCSF is what lets you start now even if you don't have capex committed. If you want to be ready for any future PSDS Phase 5, the right step in 2026 is an LCSF application for the HDP work.

3. PSDS Phase 4 (closed to new apps, delivery continues)

The headline scheme closed to new applications in November 2024. Existing awards delivering across FY 2025-26, 2026-27 and 2027-28. £530m allocated, around 800 projects funded. Public sector estates with active Phase 4 awards continue to receive disbursement against milestones.

Whether a Phase 5 will be announced is uncertain. The Treasury position has been that PSDS achieved its objectives within the original budget envelope; the Decarbonisation Strategy is being recalibrated for the next Spending Review. No formal Phase 5 announcement has been made. We track this monthly and notify clients of any changes.

What public sector bodies should do in 2026

Three options, in order of usefulness:

1. Apply for LCSF for HDP refresh. Estates that already have an HDP from 2022–24 should refresh it. Estates that don't have one should commission one through LCSF. Cost to the public body: typically £0 (LCSF covers it). Outcome: ready for any new capital funding window.
2. Apply for Salix BAU loans for the strongest-payback projects. Solar PV with heat pump retrofit and BMS upgrades typically pays back fast enough to support a 5-8 year interest-free loan with margin. Apply now rather than wait for an uncertain Phase 5.
3. For NHS trusts and councils in eligible Mayoral Authority areas: the new Local Growth Fund (£1.5bn, 3 years from April 2026) provides additional capital. Eligible authorities: Greater Manchester (GMCA), West Midlands (WMCA), Liverpool City Region, West Yorkshire, South Yorkshire, North East, Tees Valley, East Midlands, York & North Yorkshire, plus the most recent additions including Hull/East Yorkshire and Lancashire.

Procurement frameworks for Salix-funded work

Salix-funded works are procured through public-sector compliant frameworks. The relevant ones for solar in 2026:

• NHS SBS Decarbonisation Framework — preferred for NHS trusts
• Crown Commercial Service RM6168 — consultancy
• ESPO MSTAR3 — installation works (most schools and councils)
• NEPO 522 — North East-specific
• YPO Frameworks — Yorkshire / regional
• P22 (Procure22) — major NHS capital schemes

The right framework depends on the public body's standard procurement route, the project value, and any sub-regional arrangements. We coordinate procurement on behalf of public-sector clients through these frameworks.

What we do for public sector clients

For NHS trusts, schools, councils and FE colleges, our standard scope:

• HDP refresh (LCSF-funded) — 4-8 weeks per estate, IES VE modelling, RIBA Stage 4-equivalent surveys
• Salix BAU loan application — energy audit, financial modelling, loan submission
• Local Growth Fund application (where eligible) — narrative drafting against authority-specific scoring
• Procurement coordination through the appropriate framework
• Project management of the build through MCS-certified delivery partners
• M&V and reporting through the post-commissioning obligation period

For trusts that already have a 2024 PSDS Phase 4 award being delivered, we provide milestone monitoring and M&V reporting support to ensure the award is not clawed back. NHS-specific guide. Schools-specific guide.