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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.
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.
Installing LED lighting is often the fastest way of cutting waste.
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
84 Health Estate Journal September 2026
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
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