BICS Electricity Discount Scheme – eligibility, savings and how to apply

High electricity costs remain a major challenge for UK manufacturers, particularly for businesses competing with overseas firms that face lower industrial energy prices. The British Industrial Competitiveness Scheme (BICS) is designed to reduce some of that pressure by removing certain policy-related electricity costs for eligible manufacturing businesses.

The government estimates that BICS could reduce electricity costs for eligible manufacturers by around £35–£40/MWh, equivalent to savings of up to 25%. This headline saving is based on a site receiving the full 100% BICS exemption. However, the scheme is not a flat 25% discount on every electricity bill. The amount of support available depends on whether the business and its products qualify, how much electricity is used at each site and the proportion of that electricity linked to eligible manufacturing activity.

A manufacturer using 2,000 MWh of qualifying grid electricity in a year could, as an example, see around £70,000–£80,000 of annual value with a £35–£40/MWh exemption if all of that consumption received the full level of relief.

In practice, the actual benefit may be lower where only part of a site’s electricity is linked to eligible manufacturing activity.

In this guide, we explain how BICS works, who may qualify, how much support could be available and what manufacturers should prepare before applications open.

TL;DR

• The British Industrial Competitiveness Scheme (BICS) will reduce specified policy-related electricity costs for eligible manufacturers in England, Scotland and Wales.
• Government estimates suggest the support will be worth around £35–£40/MWh and could reduce electricity bills by up to 25% for some businesses.
• To qualify, a business must meet requirements relating to Companies House registration, its sector, the products it manufactures and site-level grid electricity consumption.
• Each manufacturing site must use at least 33 MWh of grid-supplied electricity annually, demonstrated using more than 16.5 MWh across the required six-month evidence period.
• The first application window runs from 1 October to 30 November 2026.
• Renewables Obligation and Feed-in Tariff exemptions are due to start in April 2027, with Capacity Market relief from October 2027.
• Only grid-supplied electricity counts. Behind-the-meter solar, CHP and on-site wind sit outside the scheme.
• There is no late entry to year one, so businesses that miss the window will not receive support from April 2027.

What is the British Industrial Competitiveness Scheme (BICS)?

The British Industrial Competitiveness Scheme (BICS) is a government support scheme designed to reduce electricity costs for eligible manufacturing businesses in Great Britain.

Rather than reducing the wholesale price of electricity, BICS provides exemptions from three policy-related costs that are normally recovered through electricity bills:

• The Renewables Obligation (RO)
• Feed-in Tariffs (FiT)
• The Capacity Market (CM)

These schemes support areas such as renewable electricity generation and security of electricity supply. Their costs are placed on electricity suppliers and are typically passed through to customers as part of their electricity charges.

Businesses will still pay other components of their electricity bill, including wholesale energy costs, network charges such as TNUoS and DUoS, policy costs that sit outside the scheme including Contracts for Difference (CfD), supplier costs and any other charges that fall outside the BICS exemptions.

By removing these costs from qualifying electricity consumption, the government expects BICS to reduce electricity costs for eligible manufacturers and improve the competitiveness of British industry.

The government expects the scheme to cover more than 10,000 manufacturing businesses across Great Britain and to be worth up to £600 million a year from April 2027.

Who is eligible for BICS?

To qualify for BICS, a manufacturing business must be registered at Companies House and meet three further eligibility criteria:

1) Operate in an eligible sector

BICS eligibility is partly determined using the UK Standard Industrial Classification (SIC) 2007 system.

For businesses required to record SIC codes at Companies House, at least one registered SIC code must appear on the eligible BICS list and accurately reflect the activities carried out at the manufacturing site.

The government published its final list of eligible SIC and HS codes for the 2027 scheme year in August 2026.

2) Manufacture an eligible product

The site must also manufacture a qualifying product identified by an eligible six-digit Harmonised System (HS) code.

HS codes are used to classify different types of goods and products. Products may include goods sold to another business or transferred for use in manufacturing at another site. The government guidance also makes provision for certain manufacturing processes that contribute to an eligible product.

3) Meet the electricity-use threshold

Each manufacturing site for which support is claimed must consume at least 33 MWh of grid-supplied electricity per year.

Businesses must provide evidence showing more than 16.5 MWh of grid electricity consumption across the most recent six consecutive months available within the previous 12 months.

The threshold applies at manufacturing-site level, so businesses operating several sites will need to consider each site separately.

How much of a manufacturer’s electricity qualifies for BICS? 

Not all electricity used at an eligible manufacturing site will necessarily receive the same level of relief.

BICS support is designed to reflect how much of a site’s grid electricity is associated with eligible manufacturing. This is particularly important where a factory produces a mixture of eligible and ineligible products.

The government uses a pro-rating system:

For example, if eligible manufacturing accounts for 40% of a site’s grid electricity, the site would fall within the 50% exemption band. If eligible manufacturing accounts for 60%, it would fall within the 100% exemption band.

A site manufacturing only eligible products will generally be treated as qualifying for the full exemption, subject to verification and any adjustments required for shared meters or interaction with other support schemes.

How do you calculate electricity used for eligible manufacturing?

Businesses need to establish both:

• total grid electricity supplied to the manufacturing site; and
• the amount of that electricity used for eligible manufacturing activities.

Where available, submetering or electricity-monitoring data should be used to support the calculation. Where this data does not exist, the government guidance allows businesses to provide an estimate supported by an appropriate rationale and evidence.

Local and distributed electricity generation is outside the scope of BICS. Behind-the-meter solar, CHP and on-site wind are not subject to the policy costs that BICS removes, so they are not eligible for relief and must be excluded from both the total electricity consumption figure and the eligible manufacturing figure. Only electricity imported from the grid counts.

For example, if a site consumes 1,000 MWh of electricity a year, of which 300 MWh comes from its own solar generation, only the remaining 700 MWh of grid-supplied electricity is in scope for BICS.

What happens if your electricity meter is shared? 

Shared meter arrangements do not automatically prevent a business from qualifying.

A manufacturer may, for example, receive electricity through a landlord rather than holding the supply contract directly. In these circumstances, evidence may be needed to establish the total grid electricity supplied through the relevant MPAN and the share actually consumed by the applicant.

Where a meter is shared, the exemption applied at the meter is the site’s pro-rating level multiplied by the applicant’s share of that meter. For example, a business using 40% of a shared meter and qualifying for a 50% exemption band would see a 20% exemption applied to the meter in respect of its consumption. The headline band applies to that business’s own share, not across the whole meter.

Businesses with shared-meter, landlord or private-network arrangements should identify these early, as gathering the necessary supporting information may take longer than retrieving a standard electricity invoice.

Private network or ‘private wire’ arrangements also need to be checked before applying. A business supplied through a private network may qualify where it is connected to the distribution network, has the relevant metering and settlement arrangements in place, and can verify it pays the BICS policy costs. Sites connected through a generator import meter are not eligible in the first year, because settlement bodies cannot currently verify the levies on those arrangements.

When does BICS start?

Applications for the first year of BICS open on 1 October 2026 and close at 11:59pm on 30 November 2026. Eligibility decisions are expected in January 2027. Renewables Obligation and Feed-in Tariff exemptions are due to begin in April 2027, followed by Capacity Market relief from October 2027.

The window matters. There is no late entry to year one, so a business that does not apply by 30 November 2026 will not receive support from April 2027 and will need to wait for a later application round.

Successful applicants are expected to have the relevant exemption information passed to their electricity supplier so the appropriate relief can be reflected in their electricity costs.

The government’s timetable remains subject to the necessary legislation coming into force.

Is BICS being backdated to April 2026? 

The government has announced that eligible businesses will receive a one-off additional payment in 2027 intended to reflect the support they would have received if BICS had been operating from April 2026.

It is therefore more accurate to describe this as an additional payment reflecting support from April 2026 rather than saying the regular BICS bill exemption itself starts in April 2026.

Further government guidance on how this payment will be calculated and delivered is still expected.

How do businesses apply for BICS?

Businesses should prepare before October rather than waiting until the application portal opens, particularly where they operate multiple sites or need to establish the proportion of electricity associated with eligible manufacturing.

The government has published a free online BICS eligibility checker. It provides an initial indication of whether a business may qualify, and information entered into the checker is not saved or carried into an application. It is a sensible first step and businesses can also register to be notified when the application window opens.

There are also several practical application rules to be aware of. Only one application can be made per legal entity per year, although it can cover several sites. An application cannot be amended once it has been submitted. The person who starts the application must be the one who submits it, as applications cannot be transferred between users. They will also need a business GOV.UK One Login. If they are not an officer registered at Companies House, they must provide the email address of a registered officer who can confirm they are authorised to apply on behalf of the business.

Applications can also be completed by an authorised third party such as Professional Energy Services, provided the appropriate company authorisation is in place.

What information and evidence will you need? 

The exact evidence required will depend on the business and site, but applicants should expect to need information including:

• the company’s Companies House registration number
• eligible SIC and HS-code information
• details of each manufacturing site included in the claim
• relevant Meter Point Administration Numbers (MPANs)
• recent grid electricity consumption information
• evidence covering the required six-month consumption period
• details and evidence relating to eligible manufacturing activity
• calculations showing the proportion of electricity used for eligible production where pro-rating is required
• evidence of shared-meter or landlord arrangements where relevant
• details of existing British Industry Supercharger support where applicable.

The evidence becomes particularly important where a site produces both eligible and ineligible products. Businesses should be able to explain how they arrived at their electricity-use calculation and support it with appropriate data where available.

Appeal rights are limited, which is another reason to get the application right first time. A business has one right of appeal, and only on the grounds that evidence was assessed in error, that the calculated proportion of eligible manufacturing activity is wrong, or that the decision does not reflect the facts of the application.

Several outcomes carry no right of appeal at all, including failing one of the eligibility criteria or being unable to provide the six months of consumption evidence.

What happens after a successful BICS application?

A successful exemption is expected to remain valid for five years, subject to ongoing reporting and review requirements.

Businesses will need to complete an online declaration in years one, three and four confirming that relevant circumstances have not materially changed. A more detailed eligibility review takes place in year two, including updated evidence that eligible production remains in place and that the level of exemption remains appropriate. That review must be submitted between April and 30 November of the second year of support.

Businesses must also notify the government of material changes that could affect their eligibility or entitlement. These could include changes to:

• manufacturing sites
• MPANs or meters
• shared-meter arrangements
• the legal entity or ownership of the business
• the mixture of eligible and ineligible production
• receipt of other relevant support.

Supporting records relating to the BICS application and exemption must be kept for at least six years and made available if requested.

To continue receiving support after the five-year exemption expires, a renewal application must be submitted between April and December of the final year of eligibility.

BICS is therefore an ongoing compliance obligation, not simply a one-off application.

Can you receive BICS and the British Industry Supercharger (BIS)?

Potentially, but a business cannot receive duplicate relief for the same electricity consumption or activity.

A business receiving British Industry Supercharger (BIS) support can still apply for BICS if it independently meets the BICS eligibility requirements. However, electricity already benefiting from an equivalent Supercharger exemption cannot receive the same relief again through BICS.

For example, if 70% of electricity supplied through an MPAN already receives a British Industry Supercharger exemption, a subsequent full BICS exemption would apply only to the remaining 30% rather than the whole meter.

Where the same activity qualifies for both schemes, the British Industry Supercharger will generally provide the higher level of support.

Businesses already receiving industrial energy support should therefore review the interaction between the schemes carefully rather than assuming BICS either automatically applies or is unavailable.

How Professional Energy Services can help

Professional Energy Services (PES) helps manufacturers understand and manage the costs behind their electricity supply.

Our energy consultants can review your electricity consumption, MPANs, site arrangements and existing contracts to help you understand where BICS could fit into your wider energy-cost strategy.

With applications opening on 1 October 2026, businesses that may qualify should start gathering the relevant electricity and site information now. If you need support understanding your energy data or the potential impact of BICS on your electricity costs, speak to the PES team.