How does BICS reduce your electricity costs?

The British Industrial Competitiveness Scheme (BICS), led by the Department for Business and Trade, does not hand out a grant or a discount. It works by removing certain policy costs from your electricity bill.

A large part of what a manufacturer pays for electricity is not the energy itself - it is the indirect cost of government energy and climate policies, bundled into the unit rate. BICS exempts eligible businesses from the indirect costs of three of these: the Renewables Obligation (RO), Feed-in Tariffs (FiT) and the Capacity Market (CM).

Strip those costs out, and the electricity bill falls. That is the whole mechanism - simple in principle, but with real detail in who qualifies and by how much.

BICS applies in Great Britain only - England, Scotland and Wales - and covers manufacturing activity carried out in Great Britain. It does not extend to Northern Ireland.

How much could you save?

Government estimates put the saving at around £35 to £40 per megawatt hour (MWh) of eligible electricity - a reduction of up to 25% on electricity costs. Across the economy, the scheme is expected to be worth in the region of £600 million a year.

What that means for your business depends on two things:

1. How much electricity your site uses for eligible manufacturing. The more of your consumption that qualifies, the larger the saving.
2. Which exemption band you fall into (explained next).

For an energy-intensive manufacturer, a reduction of £35-£40 per MWh is significant enough to model now. On a site using several thousand MWh a year, the numbers become material to margin - which is exactly why it is worth calculating properly rather than relying on the headline percentage.

The exemption bands: how much of your bill gets relief

BICS does not treat every site as all-or-nothing. Where a site makes a mix of eligible and non-eligible products, relief is apportioned according to how much of the site's electricity goes to qualifying manufacturing, using banded thresholds:

• More than 25% but less than 50% of a site's electricity used for eligible manufacturing: 50% exemption
• 50% or more of a site's electricity used for eligible manufacturing: 100% exemption
• 25% or less: the site does not qualify

Because the bands are stepped rather than sliding, sitting just below a threshold can materially reduce your relief - and moving just above one can be worth a great deal. Knowing exactly where each of your sites falls, and whether that position can be evidenced accurately, is one of the most valuable parts of preparing.

Why relief is worked out site by site

BICS eligibility and relief are assessed per site, not per company. Two factories under the same ownership can land in different bands - or one may qualify while the other does not - depending on what each one makes and how it uses electricity.

For a multi-site manufacturer, this matters enormously. It means the exercise is not "does our business qualify?" but "which of our sites qualify, in which band, and what is each one worth?" That is a mapping job across your whole estate, meter by meter.

When does the saving actually arrive?

The scheme runs on a fixed government timetable, and the savings are staged:

• April 2027: Renewables Obligation and Feed-in Tariff relief begins. A one-off payment is also expected, backdating support to reflect relief from April 2026.
• October 2027: Capacity Market relief begins, deepening the saving.

So although the first relief lands in April 2027, the backdated payment means the value effectively reaches back to April 2026 - which is part of why acting early is worth real money, not just good practice.

Why the work starts now, not in 2027

Here is the part manufacturers most often miss: the savings start in 2027, but the preparation window is already open.

To receive support from the scheme's start, businesses must submit their information during the eligibility window, which for the first year runs from 1 October to 30 November 2026 (the window closes at 11:59pm on 30 November). The Department for Business and Trade then confirms eligibility decisions in January 2027. Government guidance requires six consecutive months of electricity consumption evidence for each manufacturing site, taken from the most recent period available within the 12 months before applying - which means the data-gathering period is effectively live now.

The businesses that benefit smoothly will be the ones who have already confirmed their eligibility, mapped their sites and meters, separated qualifying from non-qualifying electricity use, and prepared the evidence. Leaving it to October 2026 means doing all of that against the clock.

BICS is not the only option

BICS is not the only electricity cost relief available to manufacturers. The Energy Intensive Industries (EII) scheme and the British Industry Supercharger already offer exemptions - and for some businesses those schemes deliver larger savings, sooner.

Crucially, businesses eligible for the British Industry Supercharger cannot also receive BICS for the same electricity costs, because the same exemptions cannot be granted twice. Where a business qualifies for both, government recommends the Supercharger because it provides a higher level of support. For some manufacturers, that means acting on the Supercharger route now rather than waiting for BICS - a genuine piece of analysis worth doing before committing to either.

How eyebright helps you quantify and secure it

As an independent energy and utility consultancy, eyebright helps manufacturers turn the BICS headline into a real, evidenced number:

• Savings modelling - calculating what BICS could actually be worth across your sites, based on your consumption and likely exemption bands, so you can plan around a real figure.
• Eligibility and evidence - confirming which sites qualify and in which band, and preparing the consumption data and financial evidence an application needs.
• Ongoing tracking - using our elexi platform to capture site-level consumption continuously, so the data behind your application stays current and accurate.

Because we are wholly independent, our only interest is the right outcome for your business - whether that is BICS, an alternative relief scheme, or both, handled in the right order.

Frequently asked questions

How does BICS actually reduce electricity costs?

BICS removes the indirect costs of three government energy policies - the Renewables Obligation, Feed-in Tariffs and the Capacity Market - from eligible manufacturers' electricity bills. It does not provide a grant; it strips out policy costs that are normally bundled into the unit rate.

How much can BICS save my business?

Government estimates put the saving at around £35 to £40 per MWh of eligible electricity, or up to 25% of electricity costs. The exact amount depends on how much of your site's electricity is used for eligible manufacturing and which exemption band you fall into.

What are the BICS exemption bands?

Where more than 25% but less than 50% of a site's electricity is used for eligible manufacturing, the site receives a 50% exemption. Where 50% or more is used for eligible manufacturing, it receives a 100% exemption. At 25% or less, the site does not qualify.

When does BICS relief start?

Renewables Obligation and Feed-in Tariff relief begins in April 2027, with a one-off payment backdating support to reflect relief from April 2026. Capacity Market relief begins in October 2027.

Why do I need to act before 2027?

To receive support from the start, you must submit your information during the eligibility window, which for the first year runs from 1 October to 30 November 2026 (closing at 11:59pm on 30 November), with eligibility decisions confirmed in January 2027. Six consecutive months of electricity consumption evidence is required for each site, so the preparation period is effectively already open.

Can I claim both BICS and the EII scheme?

No - not for the same electricity costs. Businesses eligible for the British Industry Supercharger cannot also receive BICS for the same exemptions, because they cannot be granted twice. Where a business qualifies for both, government recommends the Supercharger, as it provides a higher level of support.