VCSE Energy Efficiency Scheme

The VCSE Energy Efficiency Scheme is offering Capital Grants of between £2,000 – £150,000 to implement recommended Independent Energy Assessment (IEA) measures to reduce your building’s energy costs and support the delivery of frontline services.



If you have a satisfactory IEA – a comprehensive evaluation of your building’s energy usage, efficiency and potential for energy savings, conducted by a qualified and experienced independent energy assessor – and provided you meet the wider eligibility criteria, your organisation can apply for a Capital Grant.

Value Notes

A total of £25.5 million is available.

The scheme offers:

  • Free independent energy assessments
  • Option of capital grants of between £2,000 and £150,000 

All funds must be spent and projects completed by March 2025.

To be eligible for an Independent Energy Assessment, applicants must be:

Please note that applications for Independent Energy Assessments are now closed – Capital grants are still available.

  • A single applicant with charitable, benevolent or philanthropic purposes. If the organisation distributes surpluses to individuals such as members or shareholders, they must have an asset lock and reinvest a minimum of 51% into charitable, benevolent, or philanthropic purposes. In addition, the organisation must have one of the following legal structures/statuses:
    • Charitable Incorporated Organisation (CIO)
    • Community Benefit Society (CBS)
    • Trust
    • Unincorporated Association
    • Co-operative society
    • Community Interest Company (CIC)
    • Company Limited by Guarantee (CLG)
    • Company Limited by Shares (CLS)
  • Based and operating in England.
  • Delivering frontline services or managing a building as a hub that delivers multiple frontline services.
  • Able to evidence a need for energy efficiency support.
  • Financially sustainable, and likely to continue operating for at least the next two years.
  • Able to upload their organisation’s governance document, last set of annual accounts and, if available, their building’s energy bills from 1 October 2022 to 30 September 2023.

To be eligible for a Capital Grant (in addition to the above), applicants must:

  • Have been operating for at least two years.
  • Have an existing IEA that identifies capital energy efficiency measures, includes potential cost savings, has been completed within the past two years and was conducted by a qualified and experienced independent energy assessor.
  • Provide evidence that the energy efficiency measure(s) being requested will enhance their financial resilience and support the delivery of their frontline services.
  • Have a long-term arrangement with their premises, either owning the building or having a minimum of two years left on their lease and be able to provide documents evidencing this.
  • If they have a lease, have the building owner’s permission to carry out the capital works and they must complete the Building Owners Permission Form.

The scheme’s intended outcome is to support diverse organisation types and ensure a good geographic and demographic spread of funding, so these are also factors that will be considered during assessment.

If the scheme is oversubscribed, priority will be given to:

  • Organisations directly supporting individuals and communities with critical needs, particularly those related to the rising cost of living.*
  • Organisations for whom energy is the biggest concern.
  • Micro, small and medium-sized organisations. Priority will be given to organisations with an income of less than £1 million per year. 

*Examples include: 

  • Services that address poverty, including by providing food, warmth, emergency supplies or personal grants.
  • Shelter, accommodation and housing for those most in need.
  • Advice services for people experiencing financial, housing or legal challenges.
  • Services that address specific physical and mental health issues (such as disability, addiction and dementia).
  • Education, training and employment services that improve employability.
  • Community hubs or centres, out of which a number of these services operate.

Full details can be found in the guidance notes.


The following are not eligible for funding:

  • Educational institutions, eg, schools, colleges, and universities.
  • Statutory healthcare facilities, eg, hospitals, clinics, and healthcare centres.
  • Other statutory organisations, eg, local authorities, town and parish councils.
  • Religious buildings primarily used for worship, such as churches, mosques, temples. (Religious buildings primarily used to deliver services to the community regardless of faith are eligible.)
  • Organisations applying for domestic building, eg, those occupied for personal domestic use by one person or family.
  • Measures that do not reduce energy bills significantly.
  • Measures that have a significant payback period (ideally not more than seven years).
  • Measures that are likely to need replacing before the end of the payback period.
  • Maintenance works (unless they are required to support the installation of a new energy measure).

Eligible Expenditure

Capital Grants can be used to install capital energy efficiency measures, identified in the applicant’s IEA, to reduce their building’s energy costs and support the delivery of their frontline services.

The funding is to be used to help improve the energy efficiency of the building and could support, for example:

  • Building fabric enhancements – wall, roof or floor insulation/draft-proofing, and windows and doors (efficient glazing and thermal doors), green or cool roofs, dynamic glass and phase-change materials, lowering of ceilings (especially if in conjunction with installing PCM/lighting upgrades).
  • Space and water heating measures – efficient boiler/heating (HVAC improvements), heating controls, point of use water heaters, smart building management systems, heated water low-flow fixtures, Heat Recovery Ventilation systems, Ductless Mini-Split Systems, Combined Heat and Power (CHP) Systems, Voltage optimisation, Radiant heat emitters, passive or low-energy cooling.
  • Lighting – LED lighting systems, light fittings, lighting controls and occupancy sensors, daylight harvesting systems.
  • Renewable energy measures – heat pumps, solar panels, wind turbines, Micro-Hydro Systems, battery storage.
  • Fossil fuel measures by exception and only in the event that they have been particularly recommended for the premises as part of the IEA, with limited other options available.
  • Other capital measures by exception and recognised as proven to make significant reductions in energy.
  • Minor capital works required to support the installation of energy efficiency measures may also be covered, but will be assessed on a case-by-case basis