Of everything in the BICS guidance, the site electricity-mix rule is the one most likely to be misunderstood, because it sits underneath the sector and product tests rather than alongside them — and it’s the one that actually decides how much money, if any, ends up on your bill.

Here’s the mechanics of it. Once a business has cleared the sector test and the product test, the exemption isn’t simply switched on. It’s calculated against what proportion of the site’s grid-supplied electricity actually goes toward manufacturing the eligible product. Use a quarter or less of the site’s electricity that way, and the exemption is zero, even though the business is otherwise eligible. Get that figure up into the band between roughly a quarter and a half, and the exemption is halved. Cross the halfway point, and it’s applied in full.

Two things about this catch people out. The first is that it’s banded, not gradual — there’s no reward for going from 24% to 26% beyond crossing the threshold itself, and no extra benefit for going from 51% to 90%. That means a site sitting just below one of the boundaries has a genuinely strong incentive to understand exactly where it sits, because the difference between “just under” and “just over” isn’t marginal, it’s the difference between a full exemption band and the one below it.

The second is what counts as eligible electricity in the first place. Only grid-supplied electricity is counted — on-site generation, whether that’s solar, wind, or combined heat and power, is excluded from the calculation entirely. For manufacturers who’ve invested in on-site generation as part of their own decarbonisation plans, this is worth knowing before you assume it’ll help your BICS position, because it won’t; it sits outside the calculation rather than boosting the eligible share.

For any business running a multi-purpose site — manufacturing alongside warehousing, office space, or other non-qualifying activity on the same electricity supply — getting this percentage right, with evidence that would hold up to scrutiny, is genuinely one of the more technical pieces of a BICS application. It’s also the piece most worth getting properly checked before submission, given there’s no chance to revise it afterwards.