Manufacturing businesses have faced a multitude of challenges in recent years, with rising electricity costs putting increasing pressure on profitability, competitiveness and growth.
To help reduce these costs, the UK government has introduced the British Industrial Competitiveness Scheme (BICS), which could reduce electricity costs for eligible manufacturers by up to around 20%. In this guide, we'll explain how the scheme works, who could be eligible and what it could mean for your business.
BICS is an energy support programme led by the UK government which aims to reduce electricity costs for eligible businesses based on three key policy levies:
Eligible businesses could save around £40 per MWh (4/pkWh), reducing electricity bills by around 20%, depending on their electricity usage.
Electricity is one of the highest operating costs for many manufacturers. Rising energy prices have made it more difficult for businesses to protect profit margins, invest in growth and compete internationally. BICS aims to help reduce this disadvantage.
BICS aligns with the government’s Modern Industrial Strategy, which aims to provide a more level playing field for UK businesses. Manufacturing is a key part of this strategy, helping eligible businesses compete more effectively with international manufacturers.
The Government estimates that around 10,000 businesses could be eligible under the scheme. Eligibility is focused on manufacturers operating within designated Foundational and Frontier industrial sectors.
If your business meets these criteria, BICS could help reduce your ongoing electricity costs and improve your competitiveness. To qualify, you'll need to:
While these requirements appear straightforward, many manufacturers will also need to demonstrate electricity intensity and evidence qualifying manufacturing activities. Preparing this information early can make the application process significantly smoother.
Determining your eligibility isn't always straightforward, but getting it right could unlock significant savings on your electricity costs. Businesses must demonstrate:
The value of the exemption will depend on the proportion of site electricity linked to eligible manufacturing:
|
Eligible Manufacturing Usage |
BICS Exemption |
|
Less than 25% |
No exemption |
|
25% - 50% |
50% exemption |
|
More than 50% |
100% exemption |
Accurately assessing and evidencing your eligibility will help ensure your business receives the maximum available benefit.
Rather than applying for grants, businesses eligible for the scheme will receive support through exemptions from three electricity policy levies, helping to reduce ongoing electricity costs.
The Renewable Obligation and Small Scale Feed-in-Tariff will be exempt from April 2027, and the Capacity Market will be exempt from October 2027.
Eligible manufacturing businesses are also set to receive a one-off payment in 2027 to cover the support they would have received if the scheme had taken effect in April 2026.
Once the scheme is in place, eligible savings will be applied through your electricity bills.
If you believe your business could benefit from BICS, you will need to complete an application form. Currently, the Department for Business and Trade (DBT) has confirmed a time-limited eligibility identification window, from 1st October 2026 to 30th November 2026.
Applying within the eligibility window is important to ensure you receive support from April 2027.
1st October - 30th November, 2026: Businesses must provide information to DBT regarding their eligibility.
1st October 2026 - 8th January 2027: DBT will assess and, subject to parliamentary approval of secondary legislation of the scheme, grant eligibility to businesses. They aim to have all eligible business information available to electricity suppliers from November onwards. This will be provided through a live database, and confirmation will include eligible businesses by 8th January for Year 1 of the scheme.
Eligible businesses will receive formal confirmation that they have met the criteria for BICS. It is intended that this will take the form of a structured data record held within DBT’s data platform, rather than a stand‑alone paper or PDF certificate. This data will be shared with electricity suppliers in order to process the discounts.
If your business is not awarded eligibility for BICS, you may be able to submit an appeal and reapply for the scheme.
For subsequent years, if the initial application window is missed, businesses will have the opportunity to reapply through a year-round open application window. However, there will be no mid-year entry, with businesses only able to join at the start of each delivery year (April for RO/FiT, October for CM).
Once a business is accepted onto the scheme, eligibility will be for 5 years. For the first cohort, exemptions will cover:
To further ensure that live BICS exemptions are accurately targeted, businesses will also be required to keep eligibility information up to date through a mandatory annual declaration, confirming nothing has changed. There will also be a formal review at the end of year 2.
If your business qualifies for BICS, you could significantly reduce your electricity costs. However, determining eligibility can be complex, particularly where multiple manufacturing activities or sites are involved.
Getting the application right the first time can help you avoid delays, maximise the exemptions available for energy bills and ensure you're ready when the scheme opens. Expert support can give you confidence that your eligibility has been assessed correctly, while allowing you to stay focused on running your business.
Assessing your eligibility thoroughly can help maximise your savings and reduce future electricity costs.
For eligible manufacturers, BICS could help improve cash flow, strengthen competitiveness and free up budget for future investment. Our team can help you assess your eligibility, prepare your application and provide ongoing reporting for the scheme.
If you're unsure whether your business could benefit from BICS, now is the ideal time to start preparing. Get in touch with our team to find out whether your business could qualify and how much you could save on electricity policy costs through the British Industrial Competitiveness Scheme.