How healthcare can fund energy transformation

Transforming the healthcare sector to meet modern demands requires significant investment. But with capital budgets stretched and traditional funding routes like PSDS discontinued within the NHS, how can estates teams unlock the investment needed to fund new energy technologies? 

The answer lies in thinking differently. Innovative funding models are opening doors to transformation, without the upfront cost. And with the right strategy, healthcare can turn financial constraints into opportunities for bold, sustainable change. 

The challenge: big ambitions, tight budgets 

The healthcare sector is under immense pressure. Ageing infrastructure, rising energy costs, and the urgent need to hit net zero targets are colliding with limited capital allocation and competing clinical priorities. But delaying upgrades is risky: putting patient care, operational resilience, and sustainability goals in jeopardy. 

But funding doesn’t have to be a barrier. There are still a range of financing options available to the healthcare sector. These remove the upfront cost barriers of investing in new technologies, and many of them are off-balance sheet too.  

Energy Performance Contracts (EPCs) 

EPCs are a smart way to fund energy efficiency upgrades without upfront capital. A specialist provider like Centrica Business Solutions delivers a tailored package of improvements, like LED lighting, HVAC upgrades, or building controls, and guarantees a set level of energy savings. These savings are then used to repay the cost of the project over time. 

How it works: 

• No upfront cost, it’s funded through future energy savings
• Provider guarantees performance; if savings fall short, they cover the gap
• Ideal for upgrades with measurable efficiency gains 

Benefits for healthcare estates: 

• Transfers risk to the provider, giving finance teams confidence
• Supports sustainability goals with guaranteed carbon reductions
• Simplifies internal approvals with a clear ROI and risk mitigation 

Power Purchase Agreements (PPAs) 

Under a PPA, a new Solar array will be implemented on your site, and will be installed, funded and maintained by Centrica Business Solutions. You then pay for the energy it generates at a discounted rate compared to grid pricing. 

How it works: 

• You buy energy at a pre-agreed discounted rate, we own and operate the system
• No upfront cost or maintenance responsibility, we own and operate the system
• Predictable energy pricing protects against market volatility 

Benefits for healthcare estates: 

• Reduces carbon footprint and supports net zero targets
• Delivers budget certainty with predictable energy costs
• Option to choose a contract that tracks non-domestic electricity market rates

Discount Energy Purchase (DEP) 

DEP is a flexible model where we install, fund and operate an energy solution on your site, usually a hydrogen-ready Combined Heat and Power unit. You then purchase the energy generated at a discounted rate, delivering savings from day one. 

How it works: 

• You buy energy at a pre-agreed discounted rate, we own and operate the system
• No upfront cost or maintenance responsibility, we own and operate the system.
• Predictable energy pricing protects against market volatility 

Benefits for NHS estates: 

• Immediate cost savings and carbon reductions.
• Simplifies procurement and internal approvals.
• Customisable to suit different estate sizes and energy needs. 

CHP Rental-as-a-Service 

Combined Heat and Power (CHP) systems generate electricity and useful heat simultaneously, offering a highly efficient way to power healthcare facilities and significant cost savings. With our CHP Rental-as-a-Service, you can rent a CHP for a short period of time, typically 5 years. Unlike many other financing options, 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. 

Benefits for healthcare estates: 

• Ideal for hospitals with consistent heat and power demand
• Delivers significant cost savings, without a long-term commitment
• Enhances energy resilience and reduces grid dependency 

Strategic planning: the key to unlocking investment 

To make the most of these options, estates teams need to lead with strategy: 

• Develop a Long-Term Investment Plan: Align upgrades with clinical priorities and funding cycles.
• Build Robust Business Cases: Use data to show ROI, carbon savings, and operational benefits.
• Leverage aggregated procurement – Collaborate across Trusts or ICSs to unlock economies of scale and attract investment
• Engage finance and executive teams early – Ensure alignment with organisational strategy and secure internal support 

You have the vision. Now, you have the funding models to make it happen. By embracing innovative finance, building strong business cases, and partnering strategically, estates team can unlock the investment needed to modernise infrastructure, reduce emissions, and improve patient care.