UK decarbonisation funding has changed considerably over the past two years, and not always in the direction organisations expected. Several well-known schemes have closed to new applicants. One major new scheme opens its first application window this autumn.
If you are building a business case for energy efficiency or decarbonisation investment, working from an out-of-date list of grants is an easy way to lose a quarter. This guide sets out where things stand as at September 2026: what is open, what has closed, and what is on the way.
One note before we start: funding windows move and budgets are reallocated. Treat this as a starting point rather than a definitive timetable, and always confirm current status with the scheme administrator before committing resource to an application.
A shift in how support is delivered
The most significant change in this area is structural rather than administrative.
For several years, the dominant model for industrial and public sector building decarbonisation was capital grants: government contributing towards the cost of heat pumps, insulation, lighting and process upgrades. That model has contracted sharply. The Public Sector Decarbonisation Scheme is closed to new applicants, and the Industrial Energy Transformation Fund has held its final competition window.
What is expanding in their place is electricity cost relief – schemes that reduce the policy levies on your bill rather than contributing to a capital project. The British Industrial Competitiveness Scheme is the clearest example.
This does not mean capital grants have disappeared entirely. The Green Heat Network Fund is committed at around £195 million a year to 2029/30, and the Warm Homes Plan received £13.2 billion at the 2025 Spending Review. But for industrial sites and public sector buildings specifically, the balance has moved.
That matters for planning. Bill relief improves the payback on projects you fund yourself; it does not pay for the project. Organisations that were waiting for a grant to make the numbers work may need to rebuild the business case on a different basis.
What’s open now
British Industrial Competitiveness Scheme (BICS): applications 1st October to 30th November 2026
The most significant new opportunity for manufacturers, and the one with a firm deadline this autumn.
BICS exempts eligible manufacturing businesses from Renewables Obligation, Feed-in Tariff and, from October 2027, Capacity Market levies. Government estimates the benefit at around £35-£40/MWh, describing it as reducing electricity bills by up to 25% for over 10,000 eligible businesses.
- Who: Manufacturers whose activity falls within eligible SIC codes and who make at least one eligible product by HS code.
- Window: 1st October to 30th November 2026 for year one, with eligibility decisions in January 2027.
- Support begins: April 2027, plus a one-off payment covering the period back to April 2026 for year one applicants.
- Worth knowing: There is no late route in year one. Missing the window means waiting until the April 2028 delivery year.
We have covered this in full in a separate guide.
Green Heat Network Fund: Round 12 closes 25th September 2026
A capital grant fund supporting the commercialisation and construction of low and zero carbon heat networks, and the retrofit and expansion of existing networks. Originally launched as a £288 million fund, it has received further funding since, and in January 2026 government confirmed around £195 million a year to 2029/30. It now covers England and Wales.
- Who: Organisations developing, expanding or decarbonising heat networks.
- Relevant if: You operate a campus, hospital, large mixed-use site or district scheme, or you are a substantial heat load that could anchor a network.
- Deadline: Round 12 closes 25th September 2026, with a provisional Round 13 deadline of 23rd April 2027.
Scottish Heat Network Fund
Scotland operates its own scheme, open to public, private and third sector applicants on a rolling expression of interest basis. It offers up to 50% of eligible capital expenditure, with funds to be drawn down by March 2030.
Scotland Recycling Fund
For Scottish public bodies, the Salix-administered Scotland Recycling Fund remains open and is currently taking loan applications for 2026/27. It provides 100% interest-free repayable funding, ring-fenced and match-funded by the organisation, with repayment from the energy savings achieved and a payback period of up to 12 years.
Note that the equivalent funds elsewhere are no longer open. The England Recycling Fund closed to new applications some years ago and its remaining funds closed on 31st March 2025. The Wales Recycling Fund closed to new applications on 8 July 2025.
British Industry Supercharger
Not new, but recently more generous. The Network Charging Compensation element rose from covering 60% to up to 90% of network costs from 1 April 2026, benefiting around 586 energy-intensive firms across steel, chemicals, cement, glass and paper, at a cost of roughly £420 million a year.
The Supercharger also provides 100% exemption from Contracts for Difference, Renewables Obligation, Feed-in Tariff and Capacity Market levies. Eligibility requires 7% sector-level electricity intensity and electricity costs of 20% or more of gross value added, demanding thresholds that most mid-sized manufacturers will not meet, which is precisely the gap BICS is intended to fill.
What’s closed
Public Sector Decarbonisation Scheme (PSDS)
The scheme that funded a great many public sector heat decarbonisation projects is closed to new applicants. The Phase 4 application window closed on 25th November 2024, and following the Spending Review, government confirmed there would be no additional funding beyond currently awarded projects. Around £1 billion remains allocated to those projects, with grant funding continuing until 31st March 2028.
For public sector organisations, this means heat decarbonisation now needs a different route. Realistic options include the Green Heat Network Fund where a network is viable, the Scotland Recycling Fund for Scottish bodies, and self-funded projects where the payback justifies the investment. All of these require something the grant route often did not: robust, metered evidence of current consumption and credible savings modelling.
Industrial Energy Transformation Fund (IETF)
The IETF is closed. Following the 2025 Spending Review, government confirmed there would be no further extension of the fund, and the planned second Phase 3 competition window will not take place. The Spring 2024 competition was the final window.
For context, the fund provided grants covering up to 50% of eligible costs for feasibility and engineering studies and around 30% for energy efficiency deployment for large companies, with higher rates for SMEs. There is no open window and none announced, so industrial sites that were planning around IETF should now be looking at BICS eligibility and network charging routes instead.
Not an open scheme, but worth understanding
Great British Energy solar for schools and NHS sites
A £180 million programme installing rooftop solar on public sector buildings: approximately £80 million across around 200 schools, and roughly £100 million across nearly 200 NHS sites. Installations began in 2025 and have continued through 2026.
Importantly, this is not an open application scheme. Schools are selected directly by the Department for Education, prioritising areas of deprivation in the North East, North West and West Midlands, with at least ten schools per English region. NHS sites were identified through a Trust-level expression of interest run by NHS England. Individual sites cannot apply.
It remains a useful reference point, though. Government has indicated schools could save up to around £25,000 a year and hospitals up to around £45,000 a year where solar is paired with battery storage, helpful benchmarks if you are assessing the case for self-funded rooftop solar on a comparable building.
What’s coming
BICS legislation and impact assessment. Implementing legislation was due before Parliament in autumn 2026, alongside an impact assessment setting out funding arrangements and bill payer impacts.
Removal of Carbon Price Support from April 2028. Part of the funding mechanism for BICS, and a structural change to the cost base of UK electricity worth factoring into any long-range energy budget.
Reform of energy and carbon reporting. Following the post-implementation review of SECR published in May 2026, government has indicated its approach to sustainability reporting will be taken forward through the Modernising Corporate Reporting programme. Not funding as such, but it will shape what organisations are required to measure, and measurement usually precedes investment.
Common mistakes we see
Three patterns come up repeatedly.
Planning around funding that has ended. A number of organisations still have decarbonisation plans built on the assumption that PSDS or IETF funding will return. Planning on that basis in 2026 usually means the project does not happen at all.
Missing windows because the data was not ready. Most funding applications require a credible baseline: current consumption, current costs, and a defensible model of what the intervention will save. Assembling that from twelve months of invoices takes weeks. Organisations with continuous monitoring can produce it in an afternoon, which is often the difference between making a window and missing it.
Underestimating the value of bill relief. Businesses tend to pursue capital grants and overlook levy exemptions, because a grant feels like funding and a bill reduction feels like administration. For an eligible manufacturer, BICS is likely to be worth more over the life of the scheme than any grant they would realistically have won.
How energy data strengthens a funding application
Whichever route applies to you, funders are asking the same underlying question: do you know what you currently use, and can you demonstrate what you would save?
Enerlytic provides:
- A metered baseline across all your sites, meters and utilities, the foundation of any application.
- Half-hourly consumption data, so savings can be modelled credibly rather than estimated.
- Site and sub-meter breakdowns, essential for BICS eligibility evidence and useful for showing where an intervention will have effect.
- Carbon emissions reporting for applications that require emissions data.
- Cost reporting to build the financial case, including payback periods that will stand up to finance team scrutiny.
- Post-installation monitoring to evidence delivered savings, increasingly a condition of grant funding, and always a condition of repayable loan funding.
Summary: decarbonisation funding action checklist
- Manufacturers: check your SIC and HS codes against the BICS eligible lists now. The window runs 1st October to 30th November 2026.
- Heat network projects: the Green Heat Network Fund Round 12 deadline of 25th September 2026 is imminent, with Round 13 provisionally April 2027.
- Scottish public bodies: the Scotland Recycling Fund is open for 2026/27 applications.
- Industrial sites: the IETF has closed. Reassess against BICS and network charging routes.
- Public sector in England and Wales: PSDS and the Recycling Funds are closed to new applicants. Reassess against heat network funding and self-funded payback.
- Everyone: get your baseline data in order before you need it. The organisations that secure funding are usually those that could evidence their position on the day a window opened.
Building a business case for energy investment? Enerlytic gives you the metered baseline and savings evidence that funding applications require, and the ongoing monitoring to demonstrate delivery afterwards. Book a free 30-minute demo at www.enerlytic.co.uk.
