Becca Weight, energy and programme carbon manager, Salix
At Salix we work across the public sector and housing portfolios to support the implementation of energy efficiency and heat decarbonisation projects.
Alongside homes, one of the key programmes we deliver is the Public Sector Decarbonisation Scheme which we administer on behalf of the Department for Energy Security and Net Zero.
Under this scheme, public sector organisations apply for grant funding for heat decarbonisation and energy efficiency projects, historically through an annual application cycle. Following the Spending Review in June 2025, the government announced that there would be no further investment beyond currently awarded projects.
The sector response seemed mixed: some reported that energy projects across the public sector would stall, while others saw an opportunity to rethink the financial model on which these projects had typically depended. One year on and, as we bear witness to the UK struggling to operate its infrastructure during repeated heatwaves, it continues to be an interesting and challenging time to consider what’s next for financing energy projects, particularly for the public sector estate.
Before considering the available opportunities for public sector organisations, it’s important to reflect on how we can make progress beyond the Public Sector Decarbonisation Scheme.
Firstly, it is clear that some organisations need greater support than others. As an example, schools can struggle with resources and as a result have historically been underfunded – they often don’t have in-house energy teams and networks to access and deliver large capital grants. Consequently, funding awards are not based on a level playing field and it shows, particularly given recent school closures as a result of climbing temperatures. Schools are one of the cornerstones of our communities, often acting as a key public space where people have the most interaction; demonstrating their resilience through investment in building fabric, energy efficiency and generation upgrades is one way to build public trust in retrofit.
Another area when thinking about what could be beyond the Public Sector Decarbonisation Scheme, is the opportunity of cooling. The Public Sector Decarbonisation Scheme did not fund cooling where it did not already exist, as per the energy saving remit of the scheme. However, it is becoming increasingly likely that existing buildings will need to implement some sort of mechanical cooling where passive techniques are not practicable. In short, rebalancing the funding mechanisms for organisations and considering the co-benefits, or trade-offs, as well as identifying the most valuable technologies to invest in for a sustainable and resilient future, are key steps to take in meaningfully accelerating public sector decarbonisation at scale.
This strategy would not only unlock energy savings and support the public sector’s net zero target of reducing carbon emissions by 75% by 2037 but also inspire and support the next generation and ensure there are safe, reliable public spaces upon which communities can rely. However, the gap that the Public Sector Decarbonisation Scheme has left is hard to ignore, as acknowledged by the Climate Change Committee’s progress in reducing emissions report.
So, what can public sector organisations do to develop and deliver energy projects against this backdrop?
Energy efficiency and generation projects such as the installation of LEDs, solar PV, and improvements in monitoring and controls can have short paybacks and make a straightforward business case for investment utilising existing, albeit constrained, budgets.
Once the benefits are realised, greater stakeholder buy-in can catalyse further support for larger and more impactful heat decarbonisation projects, whilst concurrently building the expertise of internal teams. For larger projects or programmes, organisations are beginning to reconsider the merit of public private partnerships. Loan and grant schemes are often fragmented, relying on different evidential requirements and ongoing commitments that public sector organisations can struggle maintaining. Public private partnerships, like energy performance contracts (EPCs) and energy as a service (EaaS), operate by transferring the ownership and risk onto a private organisation to then realise the benefits of that investment – whether that results in lower carbon emissions, more aesthetic and resilient buildings or social value. These models are becoming increasingly attractive in this landscape but procurement, and specifically complying with the Procurement Act 2023, will be critical in getting the approach right.
Place-based funding is increasingly climbing the political agenda and is something we have actively supported at Salix through Greater Manchester Combined Authority Public Building Retrofit fund. This fund is exclusively available to public sector organisations in Manchester and allows the GMCA to target funding towards projects that meet local strategic priorities. The issue is that regional support for energy projects differs, which may result in some areas facing a ‘postcode lottery’ when it comes to investment in their public buildings. What is clear from this discussion is that there is no silver bullet, and that professionals from a wide variety of backgrounds – politics, economics and the social sciences to name a few – must jointly consider and identify a strategy to decarbonise the public sector over the long term, allowing other critical benefits to be realised.
The Public Sector Decarbonisation Scheme has no doubt supported many public sector organisations to get started in advancing complex energy projects, and it’s important that the momentum created is not lost but capitalised on by inventive mechanisms. If we take the lessons learnt from a successful scheme of this scale and leverage existing partnerships and knowledge communities, even with the current gap in policy, there are opportunities to be realised. At Salix we’re excited about the opportunity this presents and are readily looking to explore how we can further support public sector organisations on their net zero journeys.
This article appeared in the July/August 2026 issue of Energy Manager magazine. Subscribe here.
