The savings come via the British Industrial Competitiveness Scheme, announced as part of the new Industrial Strategy.
From 2027, eligible businesses will be exempt from paying for the Renewables Obligation, Feed-in Tariffs and the Capacity Market — charges that currently make up a hefty slice of electricity bills.
Cornwall Insight’s forecast shows a small manufacturer, using roughly 2,350 MWh of power annually would see costs fall from £201 per MWh to £153 — a 25% drop.
That adds up to £48 per MWh in savings, or £113,000 per year on average.
That’s a big cut for firms paying around £470,000 a year for electricity before VAT — and a lifeline for businesses struggling with soaring costs and shrinking margins.
The scheme mirrors the existing British Supercharger initiative for Energy Intensive Industries, but is aimed at widening support to more businesses — though who qualifies is still to be confirmed.
Cornwall Insight warns that green levy costs are likely to remain a significant part of business bills for the rest of the decade.
And while the new exemptions will offer welcome relief, they come at a time when other new charges are being layered in.
These include levies to support Sizewell C, new hydrogen infrastructure and local transmission cost rebates.
Wholesale market pressures — including potential oil and LNG disruption due to tensions in the Middle East — also threaten to push prices up further.
The government says the expanded exemptions will be funded by “bearing down on levies” and revenues from the UK’s carbon trading scheme.
But past support for heavy industry has often led to higher costs for non-eligible customers — and it’s still unclear who will shoulder the burden this time.
