The Public Sector Decarbonisation Scheme (PSDS) is a fund dedicated to heat decarbonisation and capital energy efficiency projects in non-domestic public sector buildings across England, such as hospitals, schools, libraries, museums and the MOD estate. The funding is provided by BEIS and the scheme is delivered by Salix Finance.
The next funding window, Phase 3b, opens this month with £635m available. Phase 3c will follow in 12 months’ time. All public sector bodies should look to use the scheme to initiate decarbonisation projects in their buildings. The funding is specifically designed to help with capital costs of decarbonisation projects; therefore, all public sector bodies should take advantage of the scheme to initiate these projects in their buildings.

Ground source heat pumps (GSHPs) offer a solution for heat decarbonisation and the technology is eligible for the funding which could cover up to 88% of installation costs. GSHPs are the most efficient and effective way to decarbonise heating, the technology delivers heat with the lowest carbon emissions, lowest running costs and lowest lifecycle cost.
Kensa has worked with many organisations across a variety of different projects – from leisure centres to schools to fire stations – and has completed and rolled out successful bids in all previous rounds of the funding stream. Projects eligible for PSDS funding now include those such as the retrofitting three Northumberland County Council Fire Stations, where electric heating was replaced with GSHPs with predicted savings in energy bills of nearly £200,000 over 20 years.
The PSDS window for application, award to completion is 12-months. To ensure successful completion and project funding, Kensa’s top advice is to start early, Director of Sales, Non Domestic, Ian Goodchild, says: “In our experiences those acting early have the very best outcomes with the Fund.
Where possible, start any pre-project processes now, such as planning, external efficiency measures and potential DNO upgrades. By having this ready ahead of your project being awarded funding, you have a huge advantage to ensuring the installation programme is delivered in line with the funding’s schedule.”
With many years of experience, Kensa provides upfront support to clients to prepare for funding which is key to any successful bid. For public sector customers wanting to install ground source heat pumps, Kensa offers a free feasibility report that can be included within funding applications.
Kensa’s feasibility reports can include all the information required, from a fabric first approach to reducing total heat losses, through to the full deep retrofit of the entire heating system and controls overhaul. With full carbon saving and cost analysis provided, Kensa also issues full high-level programmes and risk analysis for the projects.
With the next round of the Public Sector Decarbonisation Scheme Phase 3b due to open for applications mid-September 2022, there is still time to look at projects and make an application. For those just starting to review possible projects, Kensa can help you with the preparation for Phase 3c, which is due to open in 2023. It is never too early to get in contact.
To book a one-to-one feasibility study today with the dedicated Kensa PSDS team, please visit https://www.kensaheatpumps.com/funding/public-sector-decarbonisation-scheme/