BICS explained: who qualifies for the British Industrial Competitiveness Scheme and what it could save

The short answer

The British Industrial Competitiveness Scheme (BICS) exempts eligible manufacturers in Great Britain from the indirect costs of the Renewables Obligation (RO) and Feed-in Tariffs (FiT) from April 2027, and from Capacity Market (CM) costs from October 2027. The government estimates the saving at around £35 to £40 per MWh, or up to 25% of an eligible firm's electricity bill. The first application window opened on 1 October 2026 and closes at 11:59pm on 30 November 2026.

Key facts

What BICS is and why it exists

BICS is a government scheme to lower electricity costs for manufacturers in sectors the Industrial Strategy treats as important for growth. It does this by removing three policy costs that suppliers normally pass on to business customers: the Renewables Obligation, Feed-in Tariffs and the Capacity Market. These are "indirect" costs because they are charged to suppliers, who recover them through unit rates or separate bill lines.

The Department for Business and Trade announced on 15 April 2026 that the scheme would be expanded by around 40%, from about 7,000 to over 10,000 eligible manufacturers, with support worth up to £600 million a year from April 2027. The current applicant guidance names the department running the scheme as the Department for Business, Innovation, Science and Trade (BIST).

BICS does not cover Contracts for Difference costs, network charges or the Climate Change Levy. Those remain on the bill. BICS applies in England, Scotland and Wales only. Northern Ireland is not included.

Who qualifies

A business must meet four tests, all of which appear in the official guidance:

• It is registered at Companies House. Sole traders are excluded.
• It operates in an eligible sector, defined by 4-digit SIC 2007 codes.
• It manufactures eligible products in Great Britain, defined by 6-digit HS codes.
• The claimed site uses at least 33 MWh a year of grid electricity. The application uses six months of bills as a proxy, so the site must show more than 16.5 MWh in that period.

Only grid-supplied electricity counts. Electricity generated on site (solar, CHP or wind) is excluded, and generator import meter arrangements are not eligible in year one.

The eligible SIC and HS code lists are published on GOV.UK. Check both: a business can be in an eligible SIC code but still need to show that the products made at the site are on the eligible HS list.

How the intensity thresholds work

The electricity intensity thresholds apply to sectors, not to individual companies. Government has calculated an electricity intensity for each 4-digit SIC code from ONS data on sector electricity use and gross value added. A SIC code is eligible if its intensity is above 0.9% for "frontier" industries (manufacturing within the eight growth-driving sectors of the Industrial Strategy, known as IS-8) or above 2.7% for "foundational" industries (those that supply inputs to frontier industries).

This means a business does not need to calculate its own electricity intensity to apply. It needs to confirm that its SIC code and products are on the published lists.

What the business does have to show is how much of each site's electricity goes into eligible production. The exemption is pro-rated in three bands:

• 25% or less of the site's grid electricity used for eligible production: 0% exemption
• More than 25% but less than 50%: 50% exemption
• 50% or more: 100% exemption

Supporting activities such as heating, ventilation, lighting and compressed air can count towards the eligible share using the same bands.

What is exempted and from when

There is no mid-year entry: businesses join in April for RO and FiT and in October for CM.

The government's July 2026 response also confirmed a one-off payment for year 1 eligible businesses, delivered as a bill credit in 2027 and funded by the Exchequer. The April 2026 announcement said this payment is backdated to reflect support from April 2026. The guidance says details of the payment will be added later.

The exemptions depend on secondary legislation. DESNZ consulted on related changes to the CfD supplier obligation from 13 August to 9 September 2026 and is analysing responses. DESNZ has published two RO levels for 2027 to 2028: 0.369 ROCs/MWh, or 0.394 if the BICS legislation is in force in time.

How to apply

Applications are made online through the BICS service at apply-for-bics.service.gov.uk. Paper applications are accepted by post but must also arrive by 11:59pm on 30 November 2026.

The guidance lists what you need:

• A GOV.UK One Login business account
• A Companies House officer or an authorised person to submit
• The company authentication code
• The MPAN for each site you are claiming
• Six consecutive months of electricity bills from the last 12 months

Applications cannot be amended after submission, so check SIC codes, HS codes and meter numbers before you submit. There is one application per legal entity per year, and it may cover several sites.

After approval, the department shares exemption details with your electricity supplier, which is expected to apply them to bills. Exemptions may appear as reduced or zero charges, as a percentage such as "50% exempt", or as split volume lines. Businesses must make annual declarations in years 1, 3 and 4 and complete a review in year 2. There is a 10 working day window to appeal a decision.

How BICS fits with the British Industry Supercharger

The British Industry Supercharger is the older scheme for energy intensive industries. According to the BICS guidance, it gives full exemption from RO, FiT, CfD and CM costs plus up to 90% compensation on network charges (TNUoS, DUoS and BSUoS), worth about £65 to £87 per MWh in total.

A business cannot receive both schemes for the same activity. BICS applies only to the share of a meter not already covered by Supercharger, and no meter can be exempted by more than 100%. The guidance notes that Supercharger generally gives more support than BICS, and that switching schemes can leave a gap in support.

If you already hold a Supercharger certificate for some sites, check whether other sites or other activities at the same site could qualify for BICS rather than assuming the group is already covered.

For multi-site businesses

Multi-site manufacturers need to plan BICS at site level, because that is how the scheme assesses eligibility and sets the exemption percentage.

• One application per legal entity. A group with several trading companies may need several applications, one for each company that holds electricity contracts for eligible sites.
• Sites are assessed separately. Contiguous areas under common control count as one site, including areas separated only by a road, railway or inland waterway. Geographically separate sites are assessed on their own.
• Each site gets its own band. A site making mostly eligible products may get 100%, while a warehouse or mixed site may get 50% or 0%.
• Shared meters. Only the applicant's share of consumption counts, and the exemption applies to that share of the MPAN.
• Deadlines are fixed. The window closes at 11:59pm on 30 November 2026, and applications cannot be amended.

What to do now: list every MPAN with its legal entity, SIC code, products and six months of bills; estimate each site's eligible share against the 25% and 50% band edges; and ask each supplier how BICS will appear on bills and in fixed-price contracts.

Worked example: a 3 GWh manufacturing site

This example uses the government's estimate and published RO figures. It is illustrative, not a quote.

Site: one manufacturing site using 3,000 MWh (3 GWh) of grid electricity a year, eligible SIC and HS codes, and not in Supercharger.

Full exemption (50% or more of electricity used for eligible production):

• Low estimate: 3,000 MWh × £35/MWh = £105,000 a year
• High estimate: 3,000 MWh × £40/MWh = £120,000 a year

Partial exemption (for example, 40% of electricity used for eligible production, so the 50% band applies):

• 50% × £105,000 = £52,500 a year
• 50% × £120,000 = £60,000 a year

How much of that is the RO? If the 0.394 ROCs/MWh level applies and the RO is valued at the 2026 to 2027 buy-out price of £69.34 per ROC (the 2027 to 2028 price is not yet published): 0.394 × £69.34 = £27.32/MWh, or 3,000 × £27.32 = £81,960 a year. The FiT and CM exemptions make up the rest of the government estimate.

Timing in the first year: RO and FiT savings start in April 2027. The CM saving starts in October 2027, so the first financial year includes about half a year of CM exemption. The actual figure depends on your supplier's pass-through terms and how CM costs are spread across the year.

How Business Savings Guru helps

Business Savings Guru is an independent business energy broker for SMEs and larger businesses, with particular expertise in multi-site and more complex procurement, and water and waste alongside. For BICS, we can help you build a site-by-site list of MPANs, legal entities and six months of bills, and check how each of your current and future supply contracts treats RO, FiT and CM costs so an exemption reaches your bills. We do not decide eligibility: that is for the government department running the scheme. Our commission is clearly disclosed on the energy contract you sign, so you know how BSG is remunerated before you commit.

Frequently asked questions

Does my business need to calculate its own electricity intensity? No. The 0.9% and 2.7% thresholds apply to sectors (4-digit SIC codes), using government calculations from ONS data. You need to check that your SIC code and products are on the published eligible lists.

When does the BICS application window close? The year 1 window closes at 11:59pm on 30 November 2026. It opened on 1 October 2026. Paper applications must also arrive by that time.

Does BICS cover the CfD levy or network charges? No. BICS covers the RO, FiT and Capacity Market only. The British Industry Supercharger covers CfD costs and gives compensation on network charges, but a business cannot get both schemes for the same activity.

Can one application cover several sites? Yes. Each legal entity makes one application a year, which can cover several sites. Each site is assessed separately and gets its own exemption band.

What if I am on a fixed-price electricity contract? The department shares exemption details with your supplier, which is expected to apply them. How this shows on a fixed-price contract depends on the contract terms, so ask your supplier how RO, FiT and CM costs are priced and how the exemption will be passed through.

How long does a BICS exemption last? The certificate lasts five years, with annual declarations in years 1, 3 and 4 and a review in year 2. Renewal applications are due in the final year.

Sources

All checked 28 October 2026.

• GOV.UK, British Industrial Competitiveness Scheme: guidance for applicants (first published 10 August 2026, updated 12 October 2026): https://www.gov.uk/government/publications/british-industrial-competitiveness-scheme-business-guidance/british-industrial-competitiveness-scheme-guidance-for-applicants
• GOV.UK, Government response to BICS consultation on regulatory changes and scheme delivery (July 2026): https://assets.publishing.service.gov.uk/media/6a4d185b024e48e52f26f47e/government-response-to-bics-consultation-on-regulatory-changes-and-scheme-delivery.pdf
• GOV.UK (DBT and HM Treasury), Government cuts electricity bill for 10,000 manufacturers in boost for UK competitiveness (15 April 2026): https://www.gov.uk/government/news/government-cuts-electricity-bill-for-10000-manufacturers-in-boost-for-uk-competitiveness
• GOV.UK (DESNZ), Proposed legislative changes to support implementation of the British Industrial Competitiveness Scheme (consultation 13 August to 9 September 2026): https://www.gov.uk/government/consultations/proposed-legislative-changes-to-support-implementation-of-the-british-industrial-competitiveness-scheme
• GOV.UK (DESNZ), Calculating the level of the Renewables Obligation for 2027 to 2028 (25 September 2026): https://www.gov.uk/government/publications/renewables-obligation-level-calculations-2027-to-2028/calculating-the-level-of-the-renewables-obligation-for-2027-to-2028
• Ofgem, Renewables Obligation buy-out price and mutualisation threshold and ceilings 2026 to 2027 (31 March 2026): https://www.ofgem.gov.uk/data/renewables-obligation-buy-out-price-and-mutualisation-threshold-and-ceilings-2026-2027
• EMR Settlement, G15 Capacity Market supplier payments guidance: https://www.emrsettlement.co.uk/document/guidance/g15-cm-supplier-payments/