30 Sep BICS: Could Your Business Benefit from Reduced Electricity Costs?
The Government’s new British Industrial Competitiveness Scheme (BICS) could offer significant electricity savings for eligible UK businesses from 2027.
We’ve included an eligibility checker at the end of this email.
With energy costs continuing to put pressure on businesses, the scheme presents an opportunity for eligible manufacturers to reduce their electricity bills and improve their competitiveness.
At Energy Smart Consultancy Ltd, we will be contacting existing clients who we believe could benefit from the scheme. However, we also want to make sure that businesses don’t miss out simply because we aren’t aware of everything they do.
What is the BICS scheme?
The British Industrial Competitiveness Scheme (BICS) is a Government initiative designed to reduce electricity costs for eligible UK manufacturing businesses.
The scheme aims to support British industry by reducing some of the government policy costs included in electricity bills.
Eligible businesses could benefit from exemptions from three electricity levies:
Renewables Obligation (RO): A charge that supports renewable electricity generation.
Feed-in Tariffs (FiT): A scheme that supports smaller-scale renewable electricity generation.
Capacity Market (CM): A charge that helps ensure sufficient electricity generation capacity is available.
The combined savings could be worth approximately £35–£40 per MWh of electricity consumed, potentially reducing eligible businesses’ electricity bills by up to 25%.
The scheme is expected to begin providing savings from April 2027, with the Capacity Market exemption following in October 2027.
Which businesses could qualify?
The scheme is aimed at manufacturing businesses operating in specific industries identified by the Government.
Importantly, eligibility isn’t determined by the size of a business. Both small and medium-sized businesses and larger organisations may qualify, provided they meet the requirements.
Generally, businesses will need to:
Be registered with Companies House.
Operate within an eligible manufacturing sector.
Manufacture qualifying products at a site in Great Britain.
Use at least 33,000 kWh of grid-supplied electricity annually at the site for which they are applying.
Eligibility also depends on the specific products manufactured and the relevant industry classification.
Businesses with multiple sites may need to assess each location separately.
Which industries could benefit?
The scheme covers a broad range of manufacturing activities. Some businesses may not immediately realise that their operations could fall within the eligible categories.
Industries and activities that may qualify include:
Engineering and metal manufacturing
Steel production and processing
Metal fabrication
Aluminium production and processing
Industrial machinery manufacturing
Automotive parts and component manufacturing
Aerospace components
Specialist engineering and precision manufacturing
Chemicals and plastics
Chemical manufacturing
Industrial chemical processing
Plastic product manufacturing
Rubber product manufacturing
Industrial coatings and materials
Pharmaceuticals and medical manufacturing
Pharmaceutical manufacturing
Medical equipment and device manufacturing
Medical supplies production
Specialist healthcare product manufacturing
Food and drink manufacturing
Certain food processing and manufacturing activities
Industrial food production
Specialist ingredient manufacturing
Construction materials
Cement and concrete production
Glass manufacturing
Ceramic manufacturing
Building material manufacturing
Insulation product manufacturing
Other potential industries
Recycling and materials recovery
Battery manufacturing
Electrical equipment manufacturing
Cooling and ventilation equipment manufacturing
Nuclear fuel processing
Certain paper and packaging manufacturing activities
This is not a definitive list, and not every business in these industries will qualify. Eligibility depends on the specific manufacturing activities and products involved.
How much could businesses save?
For businesses with significant electricity consumption, the potential savings could be substantial.
For example, a business using 150,000 kWh of electricity per year could potentially save approximately £5,250–£6,000 annually, based on the estimated savings of £35–£40 per MWh.
For businesses with higher electricity consumption, the potential savings could be even greater.
The actual savings will depend on eligibility, the amount of qualifying electricity consumed and the exemptions applicable to the business.
When can businesses apply?
The first application window is scheduled to open on 1 October 2026 and close on 30 November 2026.
Businesses are expected to receive eligibility decisions in January 2027, with the first exemptions due to take effect from April 2027.
Businesses should start reviewing their eligibility and gathering the necessary information as soon as possible to avoid missing the application deadline.
How Energy Smart Consultancy can help
At Energy Smart Consultancy Ltd, we understand that navigating government energy schemes and identifying potential savings can be complicated.
We will be contacting existing clients who we believe may benefit from BICS, helping them understand the scheme and identify the next steps.
However, we recognise that many businesses undertake activities that we may not be aware of. A company may operate primarily in one sector but also manufacture products, process materials or carry out other industrial activities that could potentially qualify.
We therefore encourage all our clients to tell us about any manufacturing, production or processing activities their business undertakes, even if these are not their main business activities.
For example, a business that primarily provides engineering services may also manufacture components or products. Similarly, a company involved in construction may have its own manufacturing or materials-processing operations.
These additional activities could be relevant when assessing eligibility.
By understanding more about what our clients do, we can help identify potential opportunities that might otherwise be overlooked.
While the Government will ultimately determine eligibility, Energy Smart can help clients understand the requirements and navigate the process.
Don’t miss the opportunity to reduce your energy costs
With energy remaining a significant operating expense for many businesses, any opportunity to reduce electricity costs is worth investigating.
The BICS scheme could provide valuable financial relief for eligible manufacturers, but businesses will need to meet the criteria and complete the application process within the required timeframe.
If you think your business may qualify, or if you’re unsure whether your activities are covered, contact Energy Smart Consultancy Ltd to discuss your circumstances.
Even if you don’t consider yourself a manufacturer, it’s worth checking. You may be carrying out activities that could make your business eligible.
We’ve included a link to an eligibility checker, provided by the UK Government – https://check-eligibility-for-bics.service.gov.uk/check
Energy Smart Consultancy Ltd — helping businesses understand their energy costs and identify opportunities to save.
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