Public Sector Decarbonisation Fund

The Public Housing Decarbonisation Fund is a government-funded scheme that has been running since 2020 and is playing a vital role in helping the UK government achieve its Net Zero by 2050 target by installing heat decarbonisation and energy efficiency measures in public buildings. By installing these retrofit measures, it is anticipated that the carbon emissions emanating from this class of properties will be reduced by 75% by 2037 when compared to 2017 data.

History of the Public Housing Decarbonisation Fund

Phase 1 delivered £1bn over the financial years 2020-2021 and 2021-2022, aiming to boost jobs in the low carbon and energy efficiency sectors by 30,000 while delivering carbon emission reductions of up to 0.1 MtCO2e/year.

Phase 2 included a greater focus on heat decarbonisation, offering grant funding of £75m to public sector businesses willing to take a "whole building" approach to decarbonise their infrastructure.

Phase 3 is currently in progress. This phase has been split by financial years, with Phase 3a having covered the financial year 2022-2023, Phase 3b for the financial year 2023-2024, and the in-progress Phase 3c running through the financial year 2024-2025. This three-year phase was granted up to £1.425Bn in funding, with £230m of this funding allocated to Phase 3c.

Applications for Phase 3c closed in November 2023, and successful applicants were notified during the spring of 2024. Next Energy is an authorised installer for this scheme and we look forward to implementing energy efficiency and heat decarbonisation measures for successful applicants in our local area.

Phase 4 is Coming

In March 2024, the government announced that Phase 4 of the Public Housing Decarbonisation Scheme had been approved with £1.17Bn worth of funding to be split over a 3 year period with £670 million in the financial year 2025-2026, £300m in the financial year 2026-2027 and £200m in the financial year 2027-2028.

This Phase will be slightly different from those that have gone before, with eligibility criteria modified to allocate grants on a value-for-money basis rather than a first-come-first-served basis as has previously been the case. Further guidance will be available over summer 2024 which will explain in greater detail the way in which applications will be prioritised.

Prepare Early for Phase 4

Public sector organisations planning on applying to Phase 4 of the Public Housing Decarbonisation Fund should take the time to prepare their applications to improve their likelihood of success at the application stage. It is highly recommended that a heat decarbonisation plan is created which identifies shortfalls in your current infrastructure and proposes energy efficiency measures that will deliver the greatest benefits.

Businesses should consider the way in which their energy is sourced and how it is delivered. They should aim to identify efficiencies in both areas and consider what low-cost measures would deliver substantial benefits in order to make a strong cost-benefit argument.

What Expertise is Necessary to Write a Heat Decarbonisation Plan?

Although guidance is yet to be published, information currently available in the public domain suggests that Phase 4 will allocate funding on a value-for-money/cost-benefit determination, so the strength of your heat decarbonisation plan may be fundamental in securing the grant funding that you need to deliver energy efficiency improvements within your infrastructure.

If your organisation does not have the necessary skill set to write such a document, you may wish to consider applying to the Public Sector Low Carbon Skills Fund to obtain support from specialist organisations to develop an appropriate plan and proposal.

This fund is specifically available to help public sector organisations access personnel with the skills and expertise that they need to produce heat decarbonisation plans and applications for this scheme.

We at Next Energy are proud to be involved in this project through our partnership with the Greater Manchester Combined Authority and can signpost public sector organisations to appropriate advice and guidance for preparing a persuasive decarbonisation strategy and plan.

Our team is highly experienced in the field of renewable energy and has been authorised installers for every energy efficiency retrofit grant scheme so far, so our project proposals can be pivotal in the success of your grant funding application.

How To Apply

To discuss whether you may be eligible for this or any other government grant scheme, please contact our friendly and experienced team today.