A private funding route to decarbonisation

When it comes to decarbonisation, the NHS does not have a technology problem – it has a funding problem. At a time of geopolitical instability, pressure on public finances, and persistent energy price volatility, NHS organisations need a credible, fundable route to deploy proven technologies such as LED lighting, solar PV, battery storage, and EV charging. John Gahan, CFO and interim CEO of eEnergy, argues that public funding support is welcome, but the scale of the challenge means the NHS also needs practical private sector models designed to work with NHS finance, procurement, and estates realities.

If the NHS is serious about decarbonising its estate, it must first solve the issue that has slowed so many projects for so long: funding.

That is the real pain point for procurement officers, estates directors, and finance teams. Most already know the technologies exist: LED lighting can cut waste quickly; solar PV can generate clean electricity on site, whether on roofs, the ground, or across car parks; battery storage can improve resilience and reduce peak demand; and EV charging is becoming an increasingly practical requirement for fleet, staff, and visitor infrastructure. The question is not whether these technologies work, but whether there is a route to deploying them that NHS finance teams can support and CFOs can engage with.

This matters now more than ever. NHS leaders are trying to decarbonise estates while dealing with an ageing-built environment, constrained budgets, operational pressure, and growing demand to improve overall resilience. Estates teams are being asked to reduce waste, cut carbon, support frontline care, and modernise infrastructure, all while capital remains tight and governance rightly rigorous. Layer onto that a more volatile geopolitical and energy backdrop and the case for action becomes stronger. Energy efficiency and on-site generation are no longer simply sustainability measures; they are increasingly a hedge against uncertainty.

The scale of the opportunity

According to the latest Estates Returns Information Collection, the NHS estate in England consumed more than 11 billion kilowatt hours (kWh) of energy in 2024/25. That underlines just how large the energy burden remains across the estate. eEnergy estimates that around 30 per cent of energy used across the public and private sectors is unnecessarily wasted. If that estimate is even broadly right, the opportunity is substantial. Eliminating avoidable waste is not a marginal gain exercise — it is a major financial and operational opportunity for the NHS.

This is especially relevant in healthcare, as every unnecessary kWh consumed is money that cannot be spent on patient care, clinical services, staffing, or frontline resilience. Every inefficient asset left in place continues to drain revenue. Every year of delay locks in avoidable waste. The financial effect is not abstract — it is immediate, cumulative, and felt across the estate.

Yet this is where too many projects stall. Even when the estates and operational case is compelling, capital is scarce, approvals are slow, and finance teams are rightly cautious about anything that creates balance sheet complexity or competes with other pressing investment priorities. The result is a familiar pattern: estates teams know what should be done, but the route to delivery is blocked. That has left many organisations reliant on government-backed funding. Government subsidy is, of course, always welcome, but it is often competitive and can frequently be difficult to navigate. More importantly, it is not guaranteed.

Finding the right route for your estate

In practice, NHS organisations tend to face four broad routes: capital expenditure (CapEx), government funding, a funded delivery model, or delay. For many Trusts, the challenge is not identifying the right technology but identifying the route that can actually get approved and delivered.

The limitations of the traditional routes are well understood.

CapEx can work, but only where there is room in already stretched capital plans and where decarbonisation projects can compete successfully against other priorities. In reality, many sensible energy projects lose out because the capital budget is already committed elsewhere or because the estate has more urgent demands. That does not make the project wrong; it simply means it never reaches the front of the queue.

Government funding is valuable and should be welcomed. Schemes such as the NHS Energy Efficiency Fund and wider public support for solar PV have an important role to play in accelerating progress, but public funding is not a complete answer. It can be episodic, competitive, and, most importantly, time-consuming. Internal resources, a proper business case — as well as the right timing — are all necessary ingredients. Many Trusts know what they want to do, but do not always have the time, confidence, or specialist support to pursue every funding pot available, and even when a bid is successful, the process itself can slow delivery.

Doing nothing may appear safe in the short term, but it is often the most expensive decision in the long term; energy waste and maintenance burden can continue unchecked, future projects become more expensive and the organisation remains exposed to volatile energy prices. What looks like prudence can become a false economy.

This is precisely why a different funding model matters.

The EPC Model: a new funding pathway for NHS Trusts

A healthcare-focused Energy Performance Contract (EPC) can help address some of the structural barriers that have historically slowed funded energy projects in the NHS. Where it is backed by access to meaningful funding scale, it creates the potential to move beyond isolated upgrades and towards estate-wide or multi-site programmes. That matters for Trusts trying to reduce energy waste, improve resilience and modernise infrastructure in a more strategic way.

Turning capital constraints into opportunities

The first issue it addresses is pressure on capital budgets. The model is positioned to be treated as revenue spend rather than CapEx, helping to protect limited NHS capital budgets and unlock full project delivery faster. For NHS organisations trying to preserve scarce CDEL, it is not a technical detail but central to whether a project can move at all. If a scheme must fight for a shrinking capital pot, it is far more likely to be delayed, reduced, or dropped entirely. A structure designed around revenue treatment offers a different route to progress.

This distinction deserves more attention than it often gets. Estates teams frequently identify savings-rich projects that make operational sense but cannot be progressed because the funding route pushes them straight into competition for scarce capital. In those circumstances, even the best business case can stall. A route that protects scarce capital while still enabling delivery changes the conversation and it turns a capital question into a performance and outcomes question.

A structure built for approvals

The second issue is the commercial structure itself — framed not as an asset purchase, but structured as a service agreement, with the delivery partner funding, owning, and maintaining the assets while the Trust pays from realised savings only. The model is built as a variable, performance-linked arrangement rather than fixed lease-style payments, with ownership retained during the term. Where payments remain genuinely variable and tied to verified performance, the arrangement may support service treatment rather than a lease liability, subject always to the Trust’s own finance and audit conclusion. Final accounting treatment sits with the Trust, but the model has clearly been designed with NHS accounting realities — and specifically IFRS 16-related concerns — in mind.

This is where many funded solutions have historically struggled to gain traction in the NHS. The issue has not been whether third-party capital exists, but whether the structure creates new accounting and governance problems while trying to solve a funding one. NHS finance teams are right to interrogate that — they should ask whether an arrangement creates lease-style obligations, whether it consumes balance sheet headroom, affects capital allocation, and whether it can withstand scrutiny from auditors and governance committees. A fundable route only works if it is also an approvable route, which is why structure matters as much as source of funds.

An integrated, multi-technology approach to estate decarbonisation

The third issue is scope. A traditional Power Purchase Agreement (PPA) is usually a solar-only conversation. It is often tied to long-term tariff-style arrangements and focused on generation. However, this model is broader; it covers LED, solar, and EV, with more flexible terms than long PPA lock-ins and with payments linked to savings rather than energy tariffs alone. It brings together four linked building blocks: reduce through LED lighting and controls; generate through solar PV across roof, carport, or ground; store through battery storage; and charge through scalable EV infrastructure. This matters because NHS estates do not need a narrow generation contract, they need a whole-estate solution that tackles waste, resilience, and future readiness together.

This broader scope is important because the best decarbonisation programmes are rarely single-technology exercises. In practice, estates leaders are often trying to solve several issues at once: reduce avoidable demand, generate more power on site, improve resilience, prepare for transport electrification, and do it all in a way that does not overwhelm the estate or the budget. Treating each technology in isolation can create stop-start delivery fragmented approvals. These in turn lead inevitably to missed value. Treating them as part of an integrated estate strategy is more effective.

LED lighting remains one of the clearest starting points because it is often the fastest way to cut waste, reduce maintenance burden, and build a stronger baseline for wider projects. It can deliver visible improvements across clinical and non-clinical environments while also producing quantified savings that support broader business cases. Once demand is reduced, the economics of on-site generation and storage often become more attractive.

Solar PV then builds on that by making better use of underutilised estate; rooftop systems can turn existing buildings into productive assets; ground-mount arrays can unlock value from available land; and carport solar PV can generate power while also improving parking environments and supporting EV charging infrastructure. For large, distributed estates, this flexibility matters.

Battery storage adds another layer of strategic value. It can improve resilience, help manage peak demand, support self-consumption of generated power and strengthen the overall economics of on-site generation. In an environment where energy price volatility is becoming more frequent, that capability is increasingly valuable.

EV charging is also moving from optional to expected. NHS organisations are increasingly thinking about fleet transition, staff charging, visitor infrastructure, and the long-term role of electrified transport across their estates. That makes EV charging less of a standalone add-on and more of a future-facing element of infrastructure planning.

A model built for NHS governance and approvals

This is what makes the funded delivery model more relevant to procurement and estates teams than another generic ‘no upfront cost’ claim. The real issue is not whether a supplier can say there is no upfront payment. What matters is whether the structure reduces friction in approvals, aligns to NHS governance and allows projects to be delivered in full, rather than compromised to fit whatever capital happens to be available. The model is designed to support multi-site rollout through standardised documentation, capped exposure per site or project, agreed baselines, and measurement and verification set up in advance. In other words, it is trying to solve not just funding, but the governance burden that comes with funded delivery across complex, live estates.

The governance point is critical. NHS estates are not simple commercial portfolios. Projects often must be delivered across live environments with minimal disruption, clear accountability, robust health and safety, stakeholder management, commissioning discipline, and reliable reporting. A funding model that only solves the financing piece, but not the practical delivery and governance piece, is only half a solution. This is where lifecycle thinking also becomes important.

Protecting capital over the long term

Too often the conversation stops at installation, whereas in reality that is only the halfway point of the lifecycle. Healthcare organisations need confidence that deployed assets will continue to perform, that savings will be evidenced, that maintenance is clear, and that accountability does not disappear the moment the system is switched on. That is why operation and maintenance services, performance reporting, optimisation, and long-term support are not optional extras. They are central to protecting the original business case.

In healthcare, this matters even more. Estates teams are not simply buying equipment, they are securing outcomes in environments where uptime, safety, governance, and continuity matter. If a Trust commits time and internal effort to getting a project approved, it is reasonable to expect that the delivery partner remains accountable for performance over the long term. That is one of the reasons an integrated EPC structure can be more useful than a narrower funding product — and why the first live reference matters so much.

Case study: Symphony Healthcare EPC

In January 2026, eEnergy announced its first NHS award using this EPC structure with Symphony Healthcare Services Limited, a subsidiary of Somerset NHS Foundation Trust. The contract covers LED lighting upgrades across 18 General Practitioner (GP) surgeries in Somerset, with a total contract value of around £0.7m. Its importance lies less in the contract size than in what it represents: a live NHS reference point for a model that might otherwise be viewed as theoretical. For procurement and estates teams, that matters because it helps move the discussion from concept to practical example.

That first EPC award also sits within a wider pattern that matters to NHS decision-makers. Funded delivery models are easier to assess when they are backed by experience of working within NHS estates, procurement routes, and live healthcare environments. Previous projects delivered through NHS Energy Efficiency Fund awards show that this is not a new conversation for us, even if the EPC structure itself is new. The significance is not simply who has developed the model, but that it has been shaped with a practical understanding of how NHS organisations evaluate, approve, and deliver energy infrastructure projects in real-world settings.

That reference point has wider value. In healthcare, where governance is rigorous and operational continuity matters, new funding structures are more likely to be considered seriously when there is a live example alongside a broader delivery history. In that sense, the combination of an initial EPC scheme and earlier NHS projects through other funding routes gives procurement, estates, and finance teams something more concrete to assess.

Energy sustainability demands action now

It also points to something bigger. A first LED project is not only about lighting; it can also be the start of a wider decarbonisation pathway. The strategic value lies in creating a route that can scale from immediate waste reduction today into a broader programme covering solar PV, battery storage, EV charging, and wider estate modernisation over time.

Set against today’s geopolitical backdrop, that becomes even more relevant. Energy price volatility is no longer an occasional disruption — it is becoming a structural feature of the operating environment. For large energy users, including the public sector, that means energy efficiency and on-site generation are no longer just ESG measures. They are a hedge against uncertainty.

For the NHS, that point is hard-edged rather than theoretical. With more than 11 billion kWh consumed annually across the NHS estate in England, even modest percentage improvements translate into meaningful savings. That is why the argument for eliminating energy waste is so compelling. It is not just about carbon reduction. It is about releasing trapped value from existing estates and redirecting that value back into patient care, estate resilience, and service improvement.

Every delayed project leaves organisations exposed to higher operating costs and further volatility in grid-supplied energy. A more efficient estate is not only a lower-carbon estate, but a more resilient and financially defensible one. It is also one that gives finance teams more confidence over future operating expenditure and gives estates teams more control over performance.

This is why the debate should not be framed as public funding versus private funding. The NHS needs both. Government support remains important and should be welcomed, but it cannot be the only answer. When government funding is finite, competitive, or delayed, viable projects should not simply stop. NHS organisations need access to private sector models that are properly designed around healthcare realities, not imported from other sectors and forced awkwardly into place.

That means a funding structure that protects scarce capital rather than consumes it. In short, it should be a service arrangement rather than a conventional asset purchase, with payments linked to verified outcomes rather than fixed lease-like obligations. The funding route should be broader than solar alone, with a delivery model that includes not just design and installation, but aftercare, maintenance, performance reporting, and lifecycle accountability.

A fundable route for NHS decarbonisation

The bigger point is this: the NHS does not lack decarbonisation ambition, and it does not lack proven technologies. What it has lacked is a sufficiently fundable route to move at pace without colliding with accounting, capital, and procurement barriers.

That is why this approach is worth attention. Its relevance lies in how closely it aligns with the constraints NHS organisations face: pressure on capital, sensitivity to accounting treatment, the need for payments to reflect performance, and the practical challenge of delivering more than a single-technology project. Backing that structure with access to funding scale and a live NHS reference point makes the proposition more tangible than a purely theoretical model.

In a more volatile world, that combination becomes strategically important. The NHS cannot control geopolitics or wholesale energy markets. However, it can decide how much avoidable waste it is prepared to tolerate across its estate, and how quickly it wants to move to reduce exposure.

Decarbonisation, then, should be viewed in the right light, not as a discretionary sustainability exercise, but as a practical route to lower waste, stronger resilience, and better control over future costs.

The technology is there. The need is clear. The question for the NHS is whether it now has a fundable route to act.

Bibliography

• NHS Digital. Estates Returns Information Collection: summary page and dataset for ERIC 2024/25. Leeds: NHS Digital. 16 Oct 2025
• NHS Digital. Estates Returns Information Collection: summary page and dataset for ERIC 2023/24. Leeds: NHS Digital. 19 Dec 2024