Your BICS application asks a question your electricity bill cannot answer.

What the scheme does, in two paragraphs

From 2027, according to the scheme page, BICS will reduce electricity costs by up to £40 per megawatt hour for eligible manufacturers, by exempting them from the indirect costs of the Renewables Obligation, the Capacity Market and Feed-in Tariffs. To be eligible, a business must be registered at Companies House, operate in an eligible sector (by SIC code), make an eligible product (by HS code), and use at least 33 MWh of grid electricity a year at each manufacturing site, evidenced as more than 16.5 MWh over six months.

Whether your sector and products qualify is a question for the government’s own eligibility checker, not for us. Applications close at 11:59pm on 30 November 2026. This guide is about the part of the application that comes after eligibility: how much of your electricity the relief applies to.

The split decides the band, and the bands are wide

A site that makes only eligible products normally receives a 100% exemption, subject to verification. A site that makes both eligible and ineligible products is pro-rated. You take the grid electricity used for eligible activity, divide it by the site’s total grid electricity over the same six months, and the result puts the site in one of three bands.

The same three bands apply a second time, inside the calculation, to shared services. Where a supporting activity such as compressed air, cooling, lighting or materials handling serves both eligible and ineligible production, none of its electricity counts if 25% or less of it supports eligible production, half counts between 25% and 50%, and all of it counts at 50% or more. The threshold can be applied activity by activity or to the supporting activities in total.

Two further points from the guidance. Since its 1 October update, it has been explicit that ineligible activity on the site has to be included in the total you divide by. And there is no opportunity to amend an application once it has been submitted.

One point from the next band

Alongside the guidance, the government publishes a document of worked examples called Annex B. Its section 3 works through four sites calculating their split. The third is a large mixed site with no comprehensive sub-metering, which apportions its electricity from production records and standard consumption estimates. Over six months it used 2,000 MWh. It attributed 980 MWh to eligible production. Its shared cooling, testing, maintenance, lighting and logistics used 400 MWh, of which it judged 20% supported the eligible product; that is under the 25% threshold, so none of the 400 MWh counted.

980 ÷ 2,000 is 49%, which puts the site in the 50% band. At 50% it would have been in the 100% band, and the exemption would have covered all of its grid electricity rather than half of it.

That is not a criticism of the example, which is there to show a method the guidance accepts. It is a picture of how close a band edge can sit to an estimate, and of where the estimate does the deciding: a share of shared services judged at 20%, a line split on standard energy requirements. On a mixed site, the ratio is set by numbers like those rather than by the bill.

What the guidance asks you to show

For a mixed site, the application asks for the band, the rationale behind it, and a declaration.

• Total grid electricity for the site over the most recent six consecutive months for which you have information, from within the last 12 months. This is on your bills. Electricity generated on site, from solar panels, CHP or wind, is out of scope and excluded.
• Grid electricity used for eligible production and eligible supporting activities over the same six months. Where you have sub-metering or electricity monitoring, that data should be used. The guidance is specific that this “is only required if you have this equipment covering the relevant eligible activities during the six-month period”.
• If you have no metering, an estimate and the reasoning behind it. The guidance gives “estimates of average electricity use by machine, use of production data as a proxy or other approach” as examples. Underlying evidence is not required with the application, but may be sought in post-application checks.
• A declaration that the information is accurate to the best of your knowledge and that, where sub-metering or electricity monitoring equipment is available, it has been used to determine the band.

The rationale goes into free-text boxes limited to 2,000 characters, with supporting evidence uploaded alongside. The four worked calculations in section 3 of Annex B show what that looks like: one site with sub-metering, one estimating from equipment ratings and production records, one apportioning top-down from production records, and one on a shared meter. Two of the four use estimates rather than metering, and the guidance presents both as ways of doing it.

Where an estimate is weakest

Estimates are allowed, and for most sites applying this autumn they are the only option. They are not equally reliable everywhere. The places they tend to go wrong are predictable.

• Nameplate ratings are not consumption. A machine’s rated power is what it can draw, not what it does draw. Idle time, standby, part-load running and heaters left on between jobs all move the real figure away from rating multiplied by hours.
• Shared services are judged, not measured. Compressed air, cooling and lighting rarely have their own meters, and the 25% and 50% thresholds apply to them directly. A share judged at 24% and one judged at 26% put very different amounts of electricity into the calculation.
• Machines that make both kinds of product. Splitting one machine’s electricity between an eligible and an ineligible product by output volume assumes both draw the same energy per part. They often do not.
• Two different six-month windows. The total and the eligible figure have to cover the same six months. Production records and energy estimates assembled from different periods will not reconcile.

None of this means an estimate is wrong. It means that if your site sits near a band edge, these are the parts of the rationale most worth checking twice, because the application cannot be amended afterwards.

What metering installed now can and cannot do

It cannot help an application made this autumn. The evidence window is six months of history, and the guidance asks for monitoring data only where the equipment covered the eligible activities during that period. A meter fitted in October does not cover a six-month window ending before the 30 November deadline. If anyone suggests otherwise, read that line of the guidance again.

Where it does matter is after the application. Each year, a site receiving the exemption confirms that its circumstances have not materially changed. In the second year of support it submits a report for a full eligibility review: for sites whose exemption starts in 2027, between April and 30 November 2028. That review asks for evidence that eligible production is still taking place at a level appropriate to the band granted, and the guidance says its evidence requirements will broadly mirror the initial application. The department may also verify information, ask for supporting evidence, and carry out spot checks or site visits, and it can recover an over-exemption.

Be clear about one consequence before deciding. Under the declaration, once monitoring equipment is available it has to be used. Measured data can move a site’s split down as well as up. That is the point of measuring it, and it is better to find out from your own data than at a review.

What per-machine energy data does and does not give you

SmartFactory measures electricity at the machine and ties it to the works order that was running, so the energy each machine drew is recorded against the product it was making. Energy by machine, location and period is a query rather than a data-recovery exercise, and it exports.

• It measures the machines it is fitted to. Shared services such as compressed air, cooling and lighting are only measured if they are metered too, so most sites will still estimate part of the split.
• It does not decide whether your sector or products are eligible, calculate your band for you, or submit anything to the department.
• It does not guarantee a band. A band is set by what the site makes and how it runs, not by what measures it.
• What it changes is the kind of number in the rationale. Machine-level electricity against the product it made replaces rating multiplied by hours for those machines, over whatever six months you choose, with the records kept underneath.

What we’d actually suggest

If you are applying by 30 November: use your bills for the total, build the estimate the guidance describes, keep the worksheet, and read the four worked calculations in section 3 of Annex B before you write the rationale; the one closest to your site is the best template. You do not need monitoring to apply.

If you want the split measured before the year 2 review asks for it, that is a conversation for an engineer. Ask an engineer, or ring 0161 475 6291 and say it is a BICS question. If your site also holds a Climate Change Agreement, the same machine-level data serves both; Climate Change Agreements in plain English explains that scheme.