What is the Salix Decarbonisation Loan?
The Salix Decarbonisation Loan (formerly Salix Recycling Fund) is the UK's longest-running interest-free capital loan facility for public sector energy efficiency and decarbonisation projects. Salix Finance Ltd is a not-for-profit company funded by the Department for Energy Security and Net Zero (DESNZ) with a remit to lend to public sector bodies for projects that deliver verifiable energy and carbon savings.
For FE colleges, sixth form colleges, specialist designated institutions and land-based colleges, the Salix Decarbonisation Loan is now the default capital funding route for solar PV projects. It works simply: the corporation borrows the project capital interest-free, repays from the energy savings the project delivers, and after the repayment period ends keeps 100% of ongoing savings for the remaining asset life.
What changed at the November 2022 ONS reclassification?
Until November 2022, FE corporations sat in the not-for-profit institutions sector under ONS national accounts. That put them outside the eligibility boundary for Salix loans (which require central government public sector status). The November 2022 reclassification moved every FE corporation, sixth form college, specialist designated institution and land-based college into central government — applied retroactively to 1 April 1993.
From November 2022 every FE college in the UK has had the same Salix Decarbonisation Loan eligibility as a school, an NHS trust, or a Whitehall department. The administrative consequences (borrowing against public sector net debt, FReM accounting framework) sit with finance directors; from a project funding perspective the unlock is unambiguously positive.
What do the economics look like for a single-site general FE college?
Take a 280 kW PV installation on a general FE main teaching block:
- Project capital cost: £240,000 at £860/kW (typical mid-scale unit cost)
- Salix loan: £240,000 over 8 years (100% capital cover)
- Annual repayment: £30,000 (capital only — no interest)
- Modelled annual energy savings: £55,000–£65,000 (driven by year-round FE daytime baseload and 60% self-consumption rate)
- Net cash-flow positive year one: £25,000–£35,000
- Year-9 onwards (post-repayment): £55,000–£65,000/year for the remaining 17 years of PV system life
- 25-year nominal benefit: £1.1m–£1.4m
How do the economics scale for a multi-site group corp portfolio?
Group corp portfolio Salix bids deliver markedly stronger unit economics:
- Portfolio capital cost: £1,310,000 across 8 campuses at £815/kW
- Loan-funded share (historical example, pre-2025 England scheme era): £917,000 (70%) over 10 years — paired with £393,000 PSDS Phase 4 capital grant (30%)
- Annual Salix repayment: £92,000
- Modelled annual group-wide energy savings: £305,000
- Net cash-flow positive year one: £213,000/year
- Year-11 onwards: £305,000/year for remaining asset life
What goes into a complete Salix bid?
A complete Salix Decarbonisation Loan application includes seven elements:
- Energy savings calculation using Salix methodology — auditable baseline, modelled generation, realistic self-consumption assumption, 25-year operational projection
- Engineering design package — MCS commercial design, structural survey, electrical design, DNO G99 application
- Procurement plan — direct contract, framework, or competitive tender
- Corporation board approval minute — formal board resolution committing to the project and the repayment obligation
- Financial model — capital cost, repayment schedule, energy saving projection, net position year-by-year
- Risk register — DNO delay, structural surprises, weather, scope creep, with mitigation plans
- Climate Action Plan tie-in — how the project sits inside the corporation's AoC Climate Action Plan
We write all seven elements as part of the project engagement. The corporation's Sustainability Lead and Director of Finance review and sign; the application goes from us into Salix via the corporation's authorised signatory.
Which Salix scheme is actually open to your college in 2026?
Salix runs no single UK-wide loan pot — it administers separate schemes for DESNZ, the Scottish and Welsh governments and the Scottish Funding Council, and its live funding schemes list tags each one open, announced, delivering or closed. In August 2026 the position for an FE college is:
- England — nothing open. Phase 4 PSDS took applications 9 October–25 November 2024 and is in delivery to 31 March 2028; on 12 June 2025 government confirmed no further PSDS investment beyond awarded projects. The England Recycling Fund closed to new applicants in 2010 and its remaining funds closed 31 March 2025.
- Scotland — SPSEELS open. Zero interest, up to a 12-year payback at no more than £305 per lifetime tonne of CO₂, loans of up to 100% of eligible compliant costs, no maximum application (minimum £5,000). Eligibility rests on being a public body under the Climate Change (Scotland) Act 2009 duties — incorporated Scottish colleges qualify on that basis; confirm with Salix's Scotland team. Salix aims to assess within three weeks, and projects must complete and draw down by the end of the financial year of award.
- Wales — Wales Funding Programme open. Fixed 2.45% interest, up to 100% of project costs, £350/tCO2e with a 10-year payback, applied for by email to the Wales team; colleges are named eligible. Salix's 9 April 2026 note says funding confirmations await the new Welsh Government.
- Any nation — the evidence pack is the same: 12 months of metered consumption, before/after kWh and cost calculations, firm quotes, and board authority to borrow. Whichever route is open, our step-by-step guide covers how to apply for Salix finance funding.
Ready to submit? Our step-by-step guide covers how to apply for Salix finance funding — eligibility, the evidence pack, portal submission and what Salix actually scores.
Salix Decarbonisation Loan FAQs
How much can a single FE college borrow under Salix Decarbonisation Loan?
There is no open Salix loan for English colleges as of August 2026. In Scotland the SPSEELS loan has no maximum application limit (minimum £5,000) and can cover up to 100% of eligible compliant costs; in Wales the Wales Funding Programme funds up to 100% of project cost. Group-scale multi-campus bids are assessed on the same carbon-per-pound criteria as single sites.
What is the repayment term?
Typically 8 years for single-project Salix loans. Multi-site group corp programmes have been agreed at 10 years where the energy savings calculation supports the longer term. Repayments are made directly from the realised energy savings — never a separate budget line.
How does Salix verify the energy savings calculation?
The calculation must follow Salix's published methodology — auditable baseline (12+ months half-hourly meter data), modelled generation using accepted PV simulation tools (PVsyst, PV*Sol or equivalent accepted simulation tools), realistic self-consumption assumption per use pattern, and a 25-year operational projection. Bids with hand-waved calculations are rejected at first review.
Can we apply for multiple Salix loans across our group corp campuses?
Yes. Several FE group corporations have successfully applied for separate Salix loans across multiple campuses, either as a single combined bid or as sequential annual applications. Salix has been broadly supportive of group-scale FE applications; note FE providers were already PSDS-eligible from Phase 1 (2020) — the November 2022 ONS reclassification changed the accounting boundary, not the eligibility.
What happens after the 8-year loan repayment ends?
After repayment ends the full annual energy saving drops to the corporation's bottom line. For a typical 280 kW general FE install repaying at £33k/year against £55-65k/year of energy savings, the post-repayment net benefit is £55-65k/year for the remaining 17 years of the PV system's 25-year lifespan — typically £1m+ cumulative.
Are sixth form colleges eligible for Salix loans?
Yes — sixth form colleges sit inside the November 2022 ONS reclassification scope, whether they have converted to academy status under the Sixth Form College Academy Conversion route or remain as standalone sixth form colleges. Eligibility is identical to general FE corporations.