Can a school spend devolved formula capital on solar panels?

What devolved formula capital is

Devolved Formula Capital (DFC) is direct funding for individual schools to maintain their buildings and fund other small-scale capital projects. DfE’s condition funding methodology and spend guidance for 2026 to 2027 sets out the formula: every eligible school gets a fixed £4,000 plus £11.25 for each weighted pupil, and voluntary-aided schools receive a factor of 1.08 on top. In DfE’s worked example, primary pupils count once and secondary pupils count at 1.5, so a school with 50 primary and 500 secondary pupils has 800 weighted pupils and receives £13,000 (£14,040 if voluntary aided).

Local authorities receive the DFC for their maintained schools and must pass it on. Academy trusts and voluntary-aided bodies receive theirs from DfE. DFC is a school-level allocation: DfE says all schools can decide individually how to use it, although a responsible body may pool it with the agreement of the individual schools. There are no terms and conditions to sign, and for academies the spend forms part of the audited accounts.

What DfE says it can be spent on

The guidance describes DFC as capital funding “intended for schools to address their own priorities”, such as improvements to buildings and other facilities, including ICT, capital repairs and refurbishment and minor works, or contributing to a larger capital project to improve condition. It is capital, so it cannot pay for running costs. The 2026-27 guidance does not mention solar PV by name; it does tell responsible bodies to “consider any wider government support for decarbonisation when developing their investment plans”.

That makes the honest answer: a solar array is a capital asset that improves a school building’s facilities, and nothing in DfE’s published 2026-27 guidance rules it out, but DfE does not list it either. Confirm with your local authority or your trust’s finance lead and, for an academy, with your auditors before committing the grant.

What DFC buys in solar

The question that matters is size. Using the DfE formula and the Department for Energy Security and Net Zero’s solar cost data (DESNZ 2025/26, MCS installations, median £1,546 per kW for 4–10 kW systems and £1,262 per kW for 10–50 kW systems, excluding batteries), a school’s annual DFC buys roughly this much array:

Illustrative school	DFC (2026-27)	Solar it buys
Small primary, 90 pupils	£5,013	about 3 kW
Primary, 210 pupils	£6,363	about 4 kW
Large primary, 420 pupils	£8,725	about 6 kW
Secondary, 1,000 pupils	£20,875	about 16 kW
Secondary, 1,500 pupils	£29,313	about 23 kW

The pupil numbers are examples, not real schools. Each row is £4,000 plus £11.25 per weighted pupil (secondary pupils weighted 1.5), divided by the DESNZ median cost per kW for that size band.

Against that, a kilowatt of array that displaces grid electricity is worth about £211 a year if every kWh is used on site (875 kWh per kW per year, PVGIS v5.3 for Birmingham at a 10° south-facing tilt with 14% system losses, multiplied by 24.14p per kWh, the DESNZ non-domestic average including the Climate Change Levy). Electricity exported to the grid earns much less, which is why the share used on site decides the payback. Our guide to how much solar panels cost for a school works through that with stated assumptions.

Three sensible ways to use DFC for solar

• As the contribution to a larger project. DFC can be “contributing to a larger capital project to improve condition”. A roof replacement funded by a Condition Improvement Fund bid or School Condition Allocation, with solar priced separately and part-paid from DFC, keeps the roof need carrying the bid and the grant visible in the plan.
• Pooled across a trust, with each school’s agreement. Several schools’ DFC pooled for a shared programme turns £6,000 gifts into a six-figure budget, but pooling needs each school’s agreement.
• As the deposit when capital is not the route. If your trust prefers not to spend capital, a power purchase agreement puts the panels on the roof with no upfront spend, and the DfE’s own strategy plans a DfE-approved PPA route (see the Education Estates Strategy and school solar). DFC then goes to the roof work or the electrical upgrades a PPA does not cover.

Check before you spend

• The roof first. Do not commit capital to panels on a roof that needs replacing within the array’s life. Our school roof checklist covers age, asbestos, structure and RAAC.
• Procurement. DfE’s guidance points responsible bodies to approved buying frameworks through its Find a Framework tool.
• The funding picture. DFC sits alongside every other route on our page about solar panels for schools grants; the only national bidding route left in England is CIF, and there is no Salix loan for English schools.

Sources

• DfE, Condition funding methodology and spend guidance 2026 to 2027 (DFC formula, recipients, permitted spend).
• DfE, School capital funding, updated 14 May 2026.
• DESNZ, Solar PV cost data, 2025/26, published 28 May 2026.
• European Commission, PVGIS v5.3 (yield); DESNZ Quarterly Energy Prices (24.14p per kWh, non-domestic average including CCL, Q1 2026).