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Level 1/UK Energy Regulation & Context
Business Energy Costs & Taxes5 / 11

Business Electricity Relief

CRC Energy Efficiency Scheme history and current business electricity relief.

8 min read · Last reviewed July 2026

A UK business electricity bill is roughly half commodity and half everything else: network charges, policy costs that fund renewable generation, and taxes. That structure matters because government support for business energy costs almost never touches the wholesale price. Instead it works by relieving eligible businesses of specific non-commodity lines. Knowing which lines exist, and who qualifies for relief from them, is what this lesson covers.

Scheme details were checked in July 2026; eligibility rules evolve, so confirm against the GOV.UK sources at the end before relying on them.

What is actually on the bill

Beyond the energy itself, a business electricity bill carries: network charges for the transmission and distribution systems; policy costs, which fund schemes such as the Renewables Obligation (RO), Contracts for Difference (CfD) and the legacy Feed-in Tariffs (FiT); the Climate Change Levy, covered in the previous lesson; and supplier margin. For an average business the non-commodity share has grown steadily for two decades, which is why relief schemes target it.

Relief for energy-intensive industries

The largest support goes to energy-intensive industries (EIIs): sectors such as steel, chemicals, cement, glass and paper that compete internationally against firms paying far lower electricity costs. Under the package known as the British Industry Supercharger, eligible EIIs receive:

  • a 100% exemption from the costs of funding the RO, CfD and FiT schemes (raised from 85% in April 2024);
  • compensation for a large share of network charges, introduced from 2025;
  • compensation for certain carbon costs passed through in electricity prices.

Eligibility requires a certificate, assessed on sector and on how large electricity costs are relative to the business's value added. These schemes are why quoted "average" business electricity prices can be misleading: a qualifying steelworks and an office pay very different effective rates per kWh.

A brief history lesson: the CRC

Older colleagues will remember the CRC Energy Efficiency Scheme (originally the Carbon Reduction Commitment), a mandatory carbon allowance scheme for mid-sized organisations that ran from 2010 until its abolition in 2019. It was widely criticised as complex, and its lesson shaped current policy: when it closed, its revenue was folded into higher CCL main rates, and its reporting role passed to SECR. The current landscape of tax (CCL), discount for targets (CCA), reporting (SECR) and audit (ESOS) is deliberately simpler, with each instrument doing one job.

Relief changes the economics of every project on site

Reliefs cut the effective price per kWh, and the effective price is what every efficiency business case runs on. A project that pays back in two years at full policy cost may take three at an EII's relieved rate; conversely, losing an exemption transforms the value of efficiency overnight. Before writing any investment case, establish what this site actually pays per marginal kWh, reliefs included. The economic analysis course builds on exactly that number.

What an energy manager should check

Three questions cover most situations. Is the organisation in an EII-eligible sector, and if so does it hold a current certificate? Is it in a CCA-eligible sector for the levy discount covered in the previous lesson? And do the bills reconcile: are the reliefs the business is entitled to actually being applied by the supplier? Billing errors on non-commodity lines are common enough that checking them is a standard early win in energy cost management.

The next lesson turns to obligations placed on energy suppliers themselves, and what they mean for businesses and households.

Sources and further reading