The Government has opened applications for the British Industrial Competitiveness Scheme (BICS), a key measure under its Modern Industrial Strategy designed to improve the competitiveness of UK manufacturing by reducing industrial energy costs.
The scheme aims to cut eligible manufacturers’ electricity bills by up to 25%, helping businesses manage rising operating costs, invest in growth and protect skilled jobs across the country. Small and medium-sized businesses could be particularly well placed to benefit, with small businesses accounting for the vast majority of firms in the sectors covered.
Businesses that qualify will receive support from April 2027, alongside an additional lump-sum payment equivalent to approximately one year of relief.
Which businesses could benefit?
The scheme is expected to benefit over 10,000 businesses and reduce electricity costs by up to £40 per megawatt hour. This could be up to 25% off your electricity bill.
The eligibility criteria for the scheme are:
- Be registered on Companies House
- Operate within an eligible sector: Eligible sectors are manufacturing frontier industries (Advanced Manufacturing, Clean Energy Industries, Creative Industries, Defence, Digital and Technologies, Financial Services, Life Sciences and Professional and Business Services) or foundational industry (providing inputs to the frontier industries), with an eligible SIC code.
- Manufacture eligible products in Great Britain: The business must make products on the eligible list, defined by 6-digit Harmonised System (HS) codes. Eligible products are goods made at the site that are either sold to another party or transferred for use in manufacturing at another site.
- Use at least 33 megawatt-hours (MWh) of grid-supplied electricity per year at the manufacturing site for which support is being claimed. Only electricity supplied from the grid counts. Electricity from on-site generation, such as behind-the-meter solar or combined heat and power, is not eligible.
Eligible businesses in England, Scotland and Wales will receive relief from the indirect costs associated with the Renewables Obligation, Feed-in Tariffs and Capacity Market. The level of savings will depend on the underlying electricity price paid by each business.
An approved exemption lasts for 5 years, however you will need to make a yearly declaration confirming that nothing material has changed in years 1, 3 and 4, and a full review in year 2. You must also notify the scheme about material changes as they happen, including changes to meters, sites, company structure through a merger or acquisition, and the mix of eligible and ineligible activity.
How much relief does BICS provide?
The level of exemption depends on the proportion of a site’s electricity that is used for eligible manufacturing.
| Electricity used for eligible manufacturing | Exemption level |
|---|---|
| 25% or less | 0% |
| More than 25% but less than 50% | 50% |
| 50% or more | 100% |
Therefore, a site needs more than 25% eligible electricity use to receive any exemption, and 50% or more for the full 100%. Relief is applied through the energy supplier.
What should manufacturers do next?
Eligible businesses should review the scheme’s requirements and submit their applications before the 30 November 2026 deadline. Given the additional year of relief available to businesses applying this year, it is worth checking eligibility as soon as possible.
Businesses can find the application form and further guidance through the official Government resources:
- Apply for the British Industrial Competitiveness Scheme (BICS)
- Read the BICS guidance for applicants
Sue Drummond, Partner, commented:
“I would encourage manufacturers to check whether they are eligible and to get their applications underway as soon as possible. With the 30 November deadline approaching and applications unable to be amended once submitted, it’s important to have the right information ready from the outset.”
How we can help
For manufacturers, reducing energy costs is an important part of protecting margins, managing cash flow and planning for future investment. Government support schemes such as BICS may provide a valuable opportunity to reduce overheads and strengthen financial resilience.
We work with manufacturing and tech companies, helping them make informed commercial decisions and to plan for growth. If you would like to discuss your business planning or growth strategy, contact our team to find out how we can support you.
Sue leads our Finance Office and brings over 35 years of experience in accountancy and business advisory services.
