Is PSDS still funding school solar in 2026?
If you’ve searched this and got two completely different answers, you’re not going mad. Both are half right. Here’s what’s actually going on, straight from gov.uk and Salix.
PSDS Phase 4 closed to new applications in November 2024, and the government confirmed in 2025 there would be no further investment beyond projects already awarded. But Salix Finance is still actively paying out over £1 billion of already-committed Phase 4 money right through to March 2028, including real spending in the 2026/27 financial year. So: closed if you haven’t got an award, very much alive if you have. That’s the whole contradiction, solved in one sentence.
I went looking into this properly because the search results genuinely are a mess. Half the articles out there say PSDS is closed and schools should look elsewhere. The other half throw around live-sounding 2026/27 budget figures as if you can still apply. I checked this against gov.uk’s own PSDS Phase 4 page and a direct quote from Salix’s chief executive, and here’s the full, straight picture.
Why you’re seeing two different answers
Both claims are pulling from something real. They’re just describing two different stages of the same programme.
Two claims, both correct, about different things
Correct. Salix stopped accepting new Phase 4 applications in November 2024. If your school doesn’t already hold an award, this door is shut, and in 2025 the government confirmed no further PSDS investment is planned beyond what’s already committed.
✔ True, about new applicantsAlso correct. The government’s September 2024 continuation announcement committed funding across financial years 2025/26 to 2027/28, including a real tranche allocated for 2026/27, to pay out projects that had already won their Phase 4 award.
✔ True, about existing award holdersThe actual PSDS timeline
PSDS launches with a £1 billion fund under BEIS (now DESNZ), the start of a scheme that would run in phases for years.
Phase 4 formally opens for applications, with guidance notes published for schools, colleges, NHS trusts, councils and other public bodies.
Phase 4 closes to new applications. That same month, DESNZ confirms continuation funding for FY2025/26 through to FY2027/28, but only for projects already in the system.
Salix’s chief executive publicly confirms: “the government has taken the difficult decision to commit no further investment for the public sector decarbonisation scheme beyond currently awarded projects.”
Real, verifiable proof this is still moving: a £35–42m Phase 4 solar contract is awarded in Merseyside via the government’s own Find a Tender service, running to March 2028.
Salix continues delivering awarded Phase 4 projects through to this date. Phase 3c awards run out to March 2026.
You might spot a stray reference online to a “PSDS Phase 5” running in 2026. We couldn’t verify this against gov.uk or Salix’s own public statements, both of which are explicit that no further investment beyond Phase 4’s existing awards has been committed. Treat any “Phase 5” claim with real scepticism until Salix confirms it directly.
You can read the government’s own record of this directly on gov.uk’s PSDS Phase 4 page, which is kept updated with confirmed award recipients.
What PSDS actually funded for schools, while it was open
Worth knowing even if you’re now looking at alternatives, because it explains why some schools with solar didn’t get it through a “solar grant” at all.
Heat decarbonisation came first
PSDS scored applications on carbon saved per pound spent. Standalone solar-only bids consistently struggled. Solar paired with a heat pump replacing an old gas boiler scored far better, so most school solar under PSDS arrived bundled into a wider heating upgrade.
Who was eligible
State-maintained schools, academies, multi-academy trusts and further education colleges could all apply, though academy type mattered, LA-maintained transitioning academies had different rules to voluntary aided or foundation schools.
So what can your school actually do in 2026?
If you don’t already hold a Phase 4 award, here are the routes genuinely open to you right now.
Salix Recycling Fund
A 0% interest loan for public sector solar, running since 2004, repaid directly from the energy savings the system generates over roughly 5–8 years. Rolling applications, subject to available funds. The most realistic route for most schools today.
Power Purchase Agreement
A third party funds, owns and maintains the panels on your roof. Your school simply buys the electricity generated at a lower rate than grid import, with no upfront cost, though you don’t own the asset.
Capital budget or reserves
Funding the install directly gives you full ownership and the biggest long-term saving, but it does mean tying up capital that might otherwise go elsewhere in the school budget.
Schools typically see 45–55% self-consumption of their solar generation, lower than a 24/7 site like an office or hospital, because school holidays and the summer break don’t line up neatly with peak solar output. Size the system to your term-time usage pattern, not just roof space.
Whichever route you take, the installer still needs to be MCS-certified, Salix requires this for systems up to 50kWp under its Compliant Technology List, and it’s required UK-wide for standard domestic and small commercial solar too. Our installer directory is a good starting point, and our dedicated solar panels for schools section covers system sizing and roof suitability in more depth.
Don’t confuse PSDS with residential schemes
One thing that trips people up: PSDS is entirely separate from the residential grants covered elsewhere on this site, like ECO4 or the Warm Homes Plan. Those are aimed at individual households, while PSDS only ever applied to public sector buildings, schools, NHS trusts, councils and central government estates. If you’re a homeowner rather than a school business manager, our main solar panels guide covers the funding routes that actually apply to you.
Frequently asked questions
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