Energy Relief Vaultby MYRIAD
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BICS

How do shared meters and landlord agreements work for BICS?

Your band for BICS relief depends on your energy usage. But how does this work for shared meters or landlord agreements?

Energy Relief Vault

Many UK manufacturers don't buy electricity directly. They rent space on an industrial estate and pay a landlord or managing agent, or they share a meter with a neighbouring business. The British Industrial Competitiveness Scheme (BICS) accommodates both set-ups, but the evidence and the calculation are different, so it pays to identify which one applies to you.

The common supply set-ups

There are three common arrangements.

  • You pay the supplier directly. You hold the account, and your bills show your MPAN and usage. This is the simplest case.
  • You pay a landlord or third party. The landlord pays the supplier and bills you for your electricity.
  • You share a meter. More than one business is supplied through the same MPAN.

The second and third can overlap. A tenant can both pay a landlord and share a meter with other tenants.

What evidence do you need if you pay a landlord?

If you don't pay the grid supplier directly, you'll need to show the role the landlord or other third party plays. At least one of the following is required:

  • a tenancy or lease agreement
  • an energy supply agreement or contract between the parties
  • electricity invoices or documents showing how electricity use is allocated
  • correspondence or supporting documents explaining the arrangement

The evidence should show the site address, the parties involved, the period covered and how the landlord allocates electricity to tenants.

You'll also need the bills you pay the landlord for the most recent six consecutive months, within the last 12. If those bills don't show how much grid electricity you used, an invoice from your landlord should confirm the amount and the MPANs involved.

How does a shared meter affect your exemption?

When a meter is shared, the exemption applies in proportion to each business's share of the electricity consumed. You work out your own pro-rating level in the usual way, and then multiply it by your proportion of the meter.

Your pro-rating band depends on the proportion of your grid electricity used for eligible manufacturing. The result puts you in one of three pro-rating tiers:

  • 25% or less of electricity used for eligible manufacturing: 0% exemption
  • More than 25% but less than 50%: 50% exemption
  • 50% or more: 100% exemption

When you share a meter, you apply that exemption level to your usage.

Company A uses 40% of a shared meter, and 45% of its own electricity use supports eligible manufacturing. That puts it in the 50% pro-rating tier. Its exemption on the meter is 50% multiplied by its 40% usage, which is 20%.

You'll need to evidence the total electricity used at the whole meter, as well as your share. Shared infrastructure or machinery doesn't count towards your eligible electricity, so be careful to include only your own.

If your meter is shared but each business has a separate MPAN, the calculation is simpler. You use only your own activity, and the result applies to your MPAN as though you were the only user.

What is the landlord's role?

Landlords and other third parties are expected to do three things:

  • supply the information that tenants need for their applications
  • pass the financial benefit of the exemption to successful tenants
  • take part in occasional surveys to help improve the scheme

There is one practical limit here. The scheme team can't compel a landlord to pass the exemption on. If you buy electricity through a landlord, it's worth agreeing in advance how the benefit will be passed through, and getting that in writing.

How do you prepare?

A conversation with your landlord should come early. Landlords can be slow to respond, and a missing invoice can hold up an application that is otherwise ready.

  1. Ask your landlord to confirm the MPAN or MPANs that supply your unit.
  2. Request the electricity invoices or allocation statements for the six-month period.
  3. Check whether any figures are estimated, and ask for actuals where possible.
  4. Agree how any exemption will be passed through in writing.

The scheme team may revise the final MPAN figures for shared arrangements, and any revisions are confirmed before April of the year the benefit starts.

Key takeaways

  • Identify your arrangement first. Direct supply, landlord billing and shared meters each need different evidence.
  • Your exemption is multiplied by your meter share. A 50% tier on a 40% share is a 20% exemption.
  • Get landlord evidence early. A lease or invoice showing the allocation is essential.
  • Agree pass-through in writing. The scheme team can't require a landlord to pass it on.

Shared arrangements are among the most common reasons applications stall, but they're manageable with some preparation. If you rent your unit or share a meter, contact the Energy Relief Vault team and they'll help you work out what you need.