Most NHS sites have a large surface car park, a 24/7 electrical baseload and a statutory reason to cut emissions — which is why hospital car park canopies keep coming back onto estates plans. What has changed is how they get paid for. The Public Sector Decarbonisation Scheme (PSDS), the route almost every NHS canopy business case was built around, closed to new applications in November 2024. This page sets out the funding position as it actually stands, and what a Trust can use instead.
First, the PSDS position
The Public Sector Decarbonisation Scheme closed to new applications in November 2024. Phase 4 allocations continue to be paid out to bodies that bid before that window shut — the phase covers financial years 2025-26 to 2027-28 — but there is no open window, and no further phase has been announced. The gov.uk PSDS collection page still lists Phases 1 to 4 only, and was last updated on 13 March 2025.
Two further points matter if you are reading an older business case:
- PSDS was heat-led. Solar was fundable as part of a bid whose primary measure was replacing fossil-fuel heating in the same building. A standalone canopy over a car park was never the thing the scheme was designed to buy, so “PSDS pays up to 100% of a solar canopy” was an overstatement even while a window was open.
- Salix does not run a general interest-free loan scheme for English public bodies. Salix administered PSDS on behalf of DESNZ, and that is a different thing from a loan facility. Interest-free lending does exist in the devolved nations: Scotland has SEELS, and in Wales the Welsh Government Energy Service runs its own funding programme. If an English business case shows a 0% Salix loan covering the balance of a canopy, that line needs replacing.
If a new phase is announced, the evidence a Trust needs is the same as it always was: twelve months of MPAN half-hourly consumption data, a canopy design with system size and modelled yield, a payback calculation, a site plan, and a confirmed planning route. That pack is worth holding ready. It is not worth planning a delivery programme around.
The NHS net zero duty has not changed
The Health and Care Act 2022 placed statutory duties on NHS bodies to contribute to the UK’s net zero and environmental targets. NHS England’s Delivering a Net Zero National Health Service sets 2040 for the emissions the NHS controls directly and 2045 for its wider supply chain. On-site generation is one of the few levers an estates team controls outright, and it reports cleanly against Scope 2.
So the driver is intact even though the grant is gone. The question is purely which funding structure carries the capital.
What an NHS Trust can actually use in 2026
Capital allowances. A canopy bought outright is plant. The Annual Investment Allowance gives 100% relief on the first £1 million of qualifying expenditure in the period, with 50% first-year allowance on the balance of special-rate expenditure. Solar PV does not qualify for full expensing — it is special-rate plant — so any model showing 100% first-year relief on a £2 million scheme is wrong. This matters mainly to Trusts with taxable trading subsidiaries and to private operators of NHS-adjacent facilities; a Trust itself is not a corporation-tax payer.
The business rates exemption. On-site renewable generation plant is excepted from rating valuations until 31 March 2035 (England: S.I. 2022/405; Scotland: S.S.I. 2023/32; Wales: W.S.I. 2023/1229). A canopy therefore does not increase the rateable value of the site for the life of the exemption. This is quietly one of the better-value items in a public-sector case because it needs no application.
OZEV Workplace Charging Scheme. If the canopy carries EV charging, WCS contributes £500 per socket, up to 40 sockets per applicant, and runs to 31 March 2027. The education strand is worth £2,000 per socket, which is relevant to NHS-linked training estates rather than to acute sites. There is also a 100% first-year allowance on chargepoint plant to 31 March 2027 for corporation tax.
Smart Export Guarantee. Export is paid under SEG, which requires MCS certification on the installation. For a hospital baseload, export is usually a small share of output — self-consumption is where the value sits — but it is not nothing on weekends and over holiday shutdowns.
PPA or lease. Where there is no capital, a power purchase agreement or a roof/land lease puts the capital on a third party and the Trust buys the generated units at an agreed rate. This is now the most common route for a canopy with no grant behind it. The trade is a long contract term and a lower net saving than ownership. Read the availability guarantees and the end-of-term position carefully, and check that the structure does not conflict with any existing energy supply contract or with NHS estates consents.
For the arithmetic behind each of these against a specific site, our hospital car park solar canopy page carries the sizing and self-consumption detail, and the solar canopy grants and funding page tracks each scheme’s current status.
Why hospital car parks still work without a grant
The reason a hospital is a good canopy site has nothing to do with the grant:
- Continuous baseload. HVAC, medical equipment, lifts and lighting run around the clock, so a high share of generation is consumed on site rather than exported. That is what makes the saving per kWp large.
- Car park scale. A district general typically has several hundred spaces; a teaching hospital considerably more. Canopy capacity scales with the parking area you already own, with no extra land take.
- Covered parking as a secondary benefit. Staff and patient parking under cover is a genuine amenity outcome, which helps a scheme through internal approval in a way a field array does not.
None of that requires a grant to be true. It does mean the business case has to stand on the energy saving and the rates position rather than on a capital contribution — which is a higher bar, and the reason some pre-2025 NHS canopy plans have stalled.
What to do with an old PSDS-based business case
- Strip out the grant line and the Salix loan line, and re-run the case on ownership versus PPA.
- Re-check the planning route. In England a canopy over off-street parking at a commercial or public site has had its own permitted development right — Class OA — since December 2023, subject to prior approval. It is conditional (4 m height, 10 m from a dwelling curtilage, glare assessment), so confirm it against the site rather than assuming it. Our solar carport planning permission page sets out the conditions.
- Confirm the grid position early. A G99 application for a scheme of this size is usually the longest item in the programme, and it is free to start.
- Keep the evidence pack current so that if a successor scheme opens, you can bid inside a short window rather than starting from nothing.
If you want a desk-based feasibility for an NHS site — system size, modelled yield, self-consumption estimate and the planning route — request one here. It is free and there is no commitment.
Also see: PSDS solar canopy status | hospital car parks | solar canopy grants and funding