How can NHS Trusts navigate the withdrawal of PSDS funding?

In this week’s Comprehensive Spending Review, Rt Hon Rachel Reeves clearly demonstrated the UK’s commitment to advancing clean energy and safeguarding energy security – with commitments to support a variety of technologies, including carbon capture, nuclear energy and home energy efficiency.

The Department for Energy Security and Net Zero (DESNZ) have taken the difficult decision to discontinue further investment in the Public Sector Decarbonisation Scheme (PSDS). Existing grants will continue until 2028, but no further funding will be allocated.

The NHS has clear targets to reach net zero by 2040 for emissions they directly control, and 2045 for supply chain emissions. For many Trusts, PSDS funding has been crucial to these plans.

NHS Trusts must now pivot in response to this announcement, and secure alternative funding pathways to continue the all-important net zero transition. 

What funding options do NHS Trusts now have?

When PSDS funding stops, NHS Trusts will have to find new ways to fund their decarbonisation plans. The good news? Other funding options do exist. We’ve offered in-house, flexible financing options for years. We combine our 35+ years experience in installing and commissioning onsite energy generation assets, with a wide range of flexible in-house financing options to help you pay for them. 

Our Energy Service Agreements include:

• Power Purchase Agreement (PPA): Finances Solar PV installations over 15-20 years, inclusive of asset, financing, and operation.
• Power Purchase Agreement (PPA) Tracker: A financing option for Solar installations that tracks non-domestic electricity market rates. This means you can rest assured that you’ll always be paying less for your Solar energy than you would have been paying for the same amount of grid-supplied electricity.
• Discount Energy Purchase (DEP): Financing on-site generation assets over a 7–15-year contract, with agreed p/kWh unit rates for electricity generated.
• CHP Rental-as-a-Service: This option allows you to rent a CHP unit for a short time period – typically 5 years. There are no minimum generation obligations, so you won’t be charged for under-usage. You can use the CHP as much or as little as your organisation needs, as your energy strategy evolves.
• Heat-as-a-Service: Finances the installation of Heat Pumps over a 7-15 contract. You can either pay a fixed-fee each month (with indexation), or pay a fixed p/kWh for the heat generated by your installation

Our financing options are all direct agreements with Centrica, using our own cash to fund your installations. Unlike many other energy companies, this means there’s no added complexities of banks or other investors being involved.

We can bundle solutions and services in a contract that can include financed multi-tech projects, maintenance, and energy insights. And we can retain responsibility for asset maintenance and availability, helping you to manage risk.

As you navigate what the withdrawal of PSDS funding means for your Trust, our team are on standby to offer any support and guidance you may need on your future funding options.