The UK government has announced the final design of the British Industrial Competitiveness Scheme (BICS), providing electricity bill support to more than 10,000 businesses. From April 2027, eligible firms could see electricity bills cut by up to 25%. Here’s our quick rundown of the scheme, including eligibility and timelines.
What is BICS?
BICS is a new government support mechanism designed to reduce electricity costs for eligible UK manufacturers and other energy intensive businesses.
It works by removing certain policy-related costs from electricity bills. Specifically, eligible firms will be exempt from the indirect costs of three schemes:
- Renewables Obligation (RO)
- Feed-in Tariffs (FIT)
- Capacity Market (CM)
The government estimates this could be worth around £35–£40 per MWh, with total support reaching as much as £600 million per year.
The scheme was first announced in June 2025 as part of the government’s Modern Industrial Strategy, aimed at key manufacturing sectors the government wants to grow, as well as the industries that supply them.
A consultation was launched in November 2025 to seek views on the design of BICS, including which firms should be in scope. The consultation response, published on 16th April, confirms the final details.
Which firms are eligible for BICS?
In the original government proposals for BICS, around 7,000 businesses were in scope. The final design of the scheme sees eligibility expanded to over 10,000 firms.
To be eligible, a business must operate in an eligible sector and manufacture at least one eligible product. These sectors are energy intensive and linked to industries the government has earmarked for growth, such as clean energy, advanced manufacturing, digital technologies, defence and life sciences. They include automotive, aerospace, steel and pharmaceuticals, but a full list of eligible sectors and products can be found on the government website. These have been defined using SIC codes and HS codes respectively.
When does BICS come into effect?
BICS comes into effect from April 2027, and the government has confirmed a one-off additional payment, also due in 2027. This will cover the support businesses would have received had the scheme been in place from April 2026.
The government has published a second consultation on the regulatory changes required to give effect to BICS and on the detailed delivery of the scheme. The consultation will run for 4 weeks, closing on 14 May 2026.
Expected delivery timeline:
- 14 May 2026: Second BICS consultation closes
- Autumn 2026: Legislation expected
- April 2027: RO and FIT relief begins
- October 2027: Capacity Market relief begins
Does BICS apply to SMEs or only large businesses?
One of the most useful clarifications in the latest announcement is that BICS is not reserved for major corporates.
Both SMEs and larger businesses may be eligible, provided they meet the qualifying criteria. Support is based on the nature of the activity being carried out and the energy used at each site, rather than the overall size of the business.
That means a specialist manufacturer with a single qualifying facility could benefit, while a much larger organisation outside scope may not.
Is every manufacturer automatically eligible for BICS?
No – BICS is targeted support, not a universal discount for every manufacturer in the UK. Eligibility depends on whether a business operates in an approved sector, manufactures eligible products, and can evidence qualifying energy use.
If a business wishes to claim BICS support for a manufacturing site, they will need to provide details of all import Metering Point Administration Numbers (MPANs) related to the site, and evidence of the proportion of electricity consumed at the site which relates to eligible production processes.
How will support be calculated?
BICS will operate on a site-by-site basis, rather than applying one decision across an entire business group.
Support will be calculated as follows:
- Less than 25% of electricity usage at the site relates to eligible manufacturing: no exemption
- Between 25% and 50% of electricity usage at the site relates to eligible manufacturing: 50% exemption
- 50% or more of electricity usage at the site relates to eligible manufacturing: 100% exemption
For businesses with multiple sites, this matters. Two facilities under the same ownership could receive different outcomes depending on their operations and energy profile.
What about hospitality, retail, offices and other sectors?
Many businesses outside manufacturing will understandably ask whether they are included.
In most cases, the answer is no. That is because BICS has been designed as an industrial competitiveness measure rather than a broad business support package. Its purpose is to help sectors facing international competition where energy costs directly affect competitiveness.
So while hospitality, retail, offices and many service-sector organisations continue to face energy pressures, they are not the primary focus of this scheme.
Will this increase bills for everyone else?
The government has stated that households and other businesses will not see higher bills as a result of these changes.
Funding is expected to come from a combination of adjustments within the energy system and wider public funding, with further detail expected in Budget 2026.
As always, the final structure will matter, and we will be watching closely for the full implementation details.
What should businesses do now?
Although support does not begin until 2027, there is a clear case for acting sooner.
Businesses that may fall within scope should begin by:
- Reviewing likely eligibility
- Checking site and meter data
- Understanding where energy is used across qualifying activities
- Considering how future exemptions may affect procurement decisions
Like many policy schemes, the businesses that engage early often gain the most value.
What does this mean for the wider market?
The government has acknowledged that UK industrial energy costs are a competitiveness issue requiring direct intervention. That recognition alone may help improve confidence in sectors that have long argued they face structural disadvantages versus overseas competitors.
For businesses outside the scheme, the challenge remains the same: managing costs through strong procurement, improved efficiency, smarter consumption and long-term planning.
For advice on British Industrial Competitiveness Scheme eligibility, get in touch with Sustainable Energy First via the form below. You can also read our guide to government support for energy intensive industries.
