Wednesday 6 October at 2pm may well be highlighted as an important event in your diary. If so, you certainly won't be alone.
It's when the funding application window opens for Phase 3 of the Public Sector Decarbonisation Scheme (PSDS) for eligible organisations in England and Wales. And as applications are processed in submission order, getting in early is advisable.
We – along with our colleagues and clients in the public sector – often liken it to trying to secure Glastonbury tickets, with the mass scramble to try to get online and successfully get an application in when the website opens.
But don't lose heart if you've not yet got your application ready, as there may still be time – plus there are other options to consider to fund your decarbonisation efforts.
PSDS Phase 3 recap
But first, for anyone not clear on what this round of the PSDS covers, here's a quick recap:
It provides funding for heat decarbonisation projects for public sector organisations
This covers the installation of low-carbon heating technologies such as heat pumps (air, water and ground), electric heating, solar thermal and biomass, and connection to existing district heating schemes
Alongside this, measures that maximise a building's energy efficiency – therefore minimising the load on its heating requirements – should be factored in. For example, building fabric improvements or better building management controls. BUT the existing heating system must be near the end of its life and need replacing
The majority of funding (85%) is therefore for projects that will be implemented between April 2022 and end of March 2023
A smaller amount (15%) will be allocated to support projects where heating systems will need replacing between 2023 and 2025, but where the work needs to start in 2022/23
Funding will cover the overall project cost minus the amount that replacing a like-for-like heating solution would entail
Applications can be submitted from 6 October until 3 November (but see above re the importance of getting in early!)
So if your organisation is eligible, you need to get your skates on.
Even if you're not successful this time – or won't be ready by the deadline – identifying suitable projects within your estate and preparing all the necessary technical detail for your application will ensure you're ahead of the game once future PSDS rounds are announced.
Or if your organisation is based in Wales or Scotland, you could apply for an interest-free loan instead (see more on this below).
Three steps to a successful application
To increase your chances of securing funding, there are some key things to consider:
1. Gather the right information. For this, you need accurate energy consumption data and a detailed assessment of your existing heating systems and the energy status of your buildings. You also need a clear assessment of the most appropriate replacement technologies, the installation requirements and cost. You can then devise a robust plan that will satisfy the application requirements. This needs to include the additional measures that will maximise the efficiency of your proposed heating solution. For example, how much insulation and where, or what kind of control and monitoring system. You may find an energy audit from a professional supplier the best way to support this.
2. Mobilise your stakeholders. The key to success with funding applications of any nature – and indeed any effective plan to work towards net zero targets – is mobilising your organisation. This means clearly communicating the importance of taking action – and the resulting benefits– to your staff, facilities management team, estates team plus senior management. Positive stakeholder engagement is crucial for facilitating buy-in and co-operation so that everyone's on board to support decarbonisation projects and ensure they can be implemented without issue or delays. (If you need support with this, talk to your energy supplier as they may have existing communication aids they can share or even produce on your behalf.)
3. Be ready to hit the ground running. Once you get confirmation of funding, you will need to have everything scheduled to start work, with whoever's going to do your installation and implement the energy efficiency measures lined up and on board. You'll also need to ensure your building and staff are primed and ready with a strategy to manage any disruption to the building's occupants. Replacing a heating system in the middle of winter may not be ideal. But the PSDS funding windows are very specific (eg 1 April 2022 to 31 March 2023 for Phase 3), so have a clear timing plan.
You can also download a report we did earlier this year on funding for the public sector funding here.
Getting your project to pay for itself
If you don't manage to secure a PSDS grant this time, Salix, the body which administers the funding, also offers interest-free loans to finance heating decarbonisation projects for organisations in Scotland and Wales. (Loans for English organisations have been halted for now.)
As the pay-back period is usually over three years and doesn't kick in until around six months after installation, it means that the energy savings the new system and energy efficiency measures deliver could feasibly fund the loan repayment.
But if no budget is available as back up, getting the calculations right are clearly important.
This is where, once again, a professional energy audit can be invaluable. An expert can then make these calculations on your behalf, drawing on experience of working this out successfully for multiple other projects and organisations.
If your organisation is based in England – where only PSDS grants rather than loans are currently being offered by Salix – these sorts of calculation could be especially useful if you are trying to build a business case to secure funding from within your organisation.
There’s lots more insight and advice to share. But the best approach is to get an expert view that's specific to your organisation, buildings, decarbonisation goals and stage in your net zero journey. So do get in touch with your Client Lead or Account Manager to get the ball rolling.
With funding deadlines – not to mention the 2050 net zero target – coming ever closer, there’s no time to lose!
Gareth has been working with clients in the energy sector for over 20 years. In his current role he looks after npower’s Public Sector team, working with his team to support organisations achieve their net zero goals.