BICS Explained: What the British Industrial Competitiveness Scheme Means for Manufacturers
Updated: Sep 10
The Department for Business and Trade (DBT) has confirmed further details on the British Industrial Competitiveness Scheme, commonly referred to as BICS.
For eligible manufacturers, the scheme could represent a meaningful reduction in electricity costs from 2027. However, the opportunity is not automatic; instead, businesses will need to understand whether they manufacture eligible products, their sites meet the required criteria and if they have the right evidence in place before the first application window opens.
From an energy management perspective, BICS should not be treated simply as a future discount. It could affect electricity budgeting, procurement strategy, supplier billing, site-level reporting and long-term investment decisions.
What is the British Industrial Competitiveness Scheme?
BICS is a government scheme designed to reduce electricity costs for eligible manufacturing businesses in Great Britain. The scheme will provide exemptions from the indirect costs of three electricity policy charges:
Renewables Obligation (RO)
Feed-in Tariffs (FiT)
Capacity Market (CM)
The government has confirmed that eligible businesses will be exempt from the Renewables Obligation and Feed-in Tariffs from April 2027, with Capacity Market exemptions applying from October 2027.
The scheme is targeted at manufacturing frontier industries within the Industrial Strategy’s growth sectors, as well as foundational manufacturing industries that provide key inputs to those sectors. The final list of eligible activities is based on both Standard Industrial Classification codes and Harmonised System product codes.
Why BICS matters for manufacturers
Electricity remains a significant cost pressure for many UK manufacturers, particularly those with high-consumption production processes, complex sites or limited ability to reduce demand without affecting output. The government has stated that BICS is intended to improve the international competitiveness of British manufacturing by reducing electricity policy cost distortions.
The Subsidy Advice Unit has summarised the expected value of support as around £35/MWh to £40/MWh, equivalent to approximately 3.5p/kWh to 4p/kWh.
For a manufacturer using 1GWh of eligible electricity per year, that level of support could represent an indicative annual benefit of approximately £35,000 to £40,000, depending on eligibility, site usage, pro-rating and final scheme rules.
For larger or multi-site manufacturers, the potential value could be considerably higher. For businesses that are not prepared, the risk is missing the first year of the scheme and delaying access to support.
How the BICS discount will be applied
BICS will be applied on a site-by-site basis. The level of support depends on the proportion of electricity used at a site for eligible manufacturing activity. Businesses will need to provide evidence of the proportion of electricity consumption that relates to the manufacture of eligible products. The government has confirmed the following banded approach:
Eligible electricity usage at site | BICS Support |
Less than 25% | No exemption |
25% to less than 50% | 50% exemption |
50% or more | 100% exemption |
This means that accurate site-level electricity data will be critical. The eligibility position may differ between sites within the same organisation, particularly where a business operates mixed manufacturing, warehousing, administration, R&D, logistics or shared facilities.
Who could be eligible?
To qualify, a business will need to operate in an eligible manufacturing sector and produce eligible products.
Eligibility will be assessed using:
SIC codes to identify qualifying business activity
HS6 codes to confirm eligible manufactured products
Site-level electricity usage
Evidence of the proportion of electricity used for eligible manufacturing activity
Companies House registration
A minimum electricity usage threshold
The latest government response confirms that businesses must be registered on Companies House and must have electricity usage of over 33MWh per year. The 33MWh threshold applies to electricity imported from the grid, rather than total site consumption.
Businesses receiving electricity through a third party’s private network, such as a landlord or site owner, may also be eligible, subject to verifiable levy information being available. This could be important for manufacturers operating from leased premises, industrial estates or shared sites.
Key BICS dates manufacturers need to know
The first year of BICS has a short application window. The government has confirmed the following timetable, subject to parliamentary approval of the secondary legislation:
Date | What happens |
1 October 2026 – 30 November 2026 | Application window for businesses to provide information to DBT |
1 October 2026 – 8 January 2027 | DBT assesses and grants eligibility |
November 2026 – 1 April 2027 | Suppliers and settlement providers prepare exemptions |
April 2027 | RO and FiT exemptions begin |
October 2027 | Capacity Market exemptions begin |
DBT has said it aims to process all eligible businesses by 8 January 2027 for the first year of the scheme, although complex cases may extend to the end of January.
For subsequent years, businesses will be able to apply through a year-round open window. However, the government has confirmed there will be no mid-year entry, meaning businesses will only be able to join at the start of the relevant delivery year.
Why manufacturers should start preparing now
The application window may not open until October 2026, but manufacturers should not wait until then to assess eligibility. BICS will require evidence, and with the application deadline closing on the 30th November 2026, now is the time to act. That evidence may need to come from finance, energy, operations, production, site management, procurement and sustainability teams.
Before the application window opens, manufacturers should review:
Companies House information and SIC codes
Eligible product lines and HS6 codes
Site-level electricity consumption
Import MPANs for each manufacturing site
Electricity used for eligible manufacturing processes
Shared meter or landlord-supplied arrangements
Current supply contracts and pass-through charge treatment
Whether RO, FiT and Capacity Market charges are visible on invoices
Budget assumptions for 2027 onwards
Any existing EII or similar support arrangements
This is particularly important for organisations with multiple sites, mixed-use facilities or complex electricity arrangements. The more complicated the estate, the more important it becomes to understand how electricity use is allocated and evidenced.
Why BICS should be part of a wider energy strategy
BICS could reduce electricity costs for eligible manufacturers, but it should not replace wider energy management activity. Policy relief can support competitiveness, but manufacturers still need to manage wholesale costs, non-commodity charges, consumption patterns, site efficiency, contract structure and future electricity demand.
BICS should therefore be considered alongside:
Energy procurement strategy
Risk management
Budget forecasting
Invoice validation
Half-hourly data review
Consumption monitoring
Capacity and network charges
Onsite generation
Battery storage
Electrification planning
Carbon reporting and Scope 2 data
The government has also acknowledged that the scheme could interact with demand-side flexibility and onsite generation. While BICS may reduce some policy-cost incentives for onsite or private wire generation, businesses can still benefit from avoided wholesale, network and supplier costs, as well as support on eligible residual grid consumption.
For manufacturers, the key point is that BICS should be reviewed as one part of the total electricity cost picture.
How Smarta Energy can help
Smarta Energy helps manufacturing businesses understand and manage the commercial impact of energy policy, procurement and site-level electricity use. For businesses reviewing BICS, we can support with:
Reviewing electricity contracts and non-commodity charge treatment
Identifying relevant MPANs and site-level supply arrangements
Reviewing half-hourly consumption data
Supporting internal teams in understanding electricity usage by site
Helping assess whether billing and reporting data is suitable for evidence gathering
Reviewing supplier invoices for RO, FiT and Capacity Market charges
Supporting budget planning for 2027 onwards
Aligning BICS considerations with procurement, risk and wider energy strategy
We do not recommend waiting until the application window opens. Manufacturers should begin reviewing eligibility, data and evidence requirements now so they are prepared to act within the October to November 2026 window.
Preparing for BICS
The British Industrial Competitiveness Scheme could provide meaningful electricity cost support for eligible manufacturers. But the benefit will depend on eligibility, site-level data, evidence quality and timely action.
For manufacturers, the next step is clear: review your eligibility, understand your electricity data and ensure your energy strategy reflects both the opportunity and the operational requirements of the scheme.
If you are speaking to a manufacturer, or if you have a current customer who is a manufacturer, it is absolutely worth exploring eligibility for this scheme, especially given the short time periods involved in gaining access in the first year. Savings are estimated to be roughly 3.5p/kwh and 4p/kwh, which could be up to £40,000 a year difference for a consumer using 1GW of power annually, as an example.
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