29% of Irish households now in energy poverty, according to ESRI
Sarah Rigney
Staff Writer

Almost one-third of Irish households are now experiencing energy poverty, with this figure set to rise if more energy price hikes are announced.

The Economic and Social Research Institute (ESRI) has just released a new report which delves into the impact of the energy crisis on households in Ireland. The report also outlines what potential solutions could help ease the financial burden on households and reduce energy poverty.

Before we jump into the report’s findings, let’s look at what exactly energy poverty is.

What is energy poverty? 

There are various definitions of energy poverty, but in this report, it’s defined as when a household spends more than one-tenth of its net income on energy.

This includes spend on the likes of gas, electricity and home heating oil, but excludes motor fuel.  

Energy poverty is at a record high

According to the ESRI, recent energy inflation has contributed to a record 29% of Irish households now experiencing energy poverty. 

If energy prices were to increase by a further 25%, which unfortunately is a real possibility, this would push 43% of Irish households into energy poverty.

Previously, the record high for households in energy poverty was 23%, back in 1994/95.

This new figure is based on energy inflation seen between January 2021 and April 2022, during which time household energy bills increased by approximately €21.27 per week on average according to the ESRI. This adds up to a significant €1,106.04 annually.

However, if you take the increase in both household energy costs and motor fuel into consideration, this then rises to €38.63 extra per week, or €2,008.76 annually.

The ESRI estimates that if energy prices rise by a further 25%, household energy costs will soar further, with bills increasing by €36.57 on average per week, or €1,901.64 annually. 

If we include motor fuels, then this means households would be spending an additional €67.66 per week, or €3,518.32 per year!

Will cutting taxes reduce energy poverty?

The ESRI’s report states that the Government’s cutting of indirect taxes on energy, like VAT, excise duty, or the carbon tax, isn't a good way to reduce energy poverty in Ireland. 

This is because most of the revenue is spent compensating higher-income households who have been less affected than lower-income households. 

Additionally, Barra Roantree, one of the authors of the ESRI report stated that cutting taxes could hinder Ireland’s incentive to invest in energy-saving technologies.

“Trying to address the impact of rising energy prices by cutting indirect taxes on fuel can have other undesirable effects, such as blunting the incentive to invest in energy-saving technology.”        

Finding the solution

While finding a solution to the energy crisis is no easy task and it cannot be resolved overnight, the ESRI has outlined what measures can be taken to help those most in need.

Instead of cutting taxes, the ESRI states that there should be an increase in welfare payments, the fuel allowance, and possibly more lump-sum payments, like the one-off €200 electricity credit earlier this year, but better targeted to those most affected by energy inflation. So, for example, a one-off double welfare payment akin to the Christmas Bonus. 

However, these measures would, unfortunately, do nothing to help those in the middle, who may not be earning a huge amount, but don’t yet qualify for any Government assistance. 

What can you do to save on your energy bills?

According to an earlier report from the ESRI, it was forecast that inflation will peak at almost 9% in 2022. With inflation in May reaching 8.2%, this forecast figure seems more and more plausible.

It’s also likely that households will have to contend with further energy price increases before the year is out.

With this in mind, you’re probably looking for ways you can cut the cost of your energy bills:

1. Switch to a cheaper energy supplier

Despite rising energy costs, there is still value to be had by switching to a different energy provider. 

There are currently 12 energy suppliers competing for new customers in Ireland, making it quite a competitive market.

Recent research from the CRU shows that record levels of Irish households are switching to a cheaper energy supplier, in a bid to save money. 

To see how much you could save, head over to our free energy comparison tool. Our service lets you compare Ireland’s main suppliers against your current supplier, calculating how much you could save annually. 

Don’t forget to also check out our other comparison tools, which will help you save money on your broadband, banking, and insurance costs as well.

2. Follow these energy-saving tips

A simple way to save is by reviewing your habits and reducing your energy consumption. Not only will the monetary results of this be reflected in your energy bill, but you’ll also be reducing your carbon footprint.

3. Consider a retrofit

While this is no quick fix to the energy crisis, carrying out a retrofit will save you money on your energy bills in the long run. 

With the Government’s micro-generation scheme coming to fruition, you may also even be able to earn money on the solar energy you produce, if you were to install solar panels.

However, we are aware that a retrofit is not cheap, but if it’s something you’re interested in, check out these grants available from the Sustainable Energy Authority of Ireland.

4. Seek out what support you may be entitled to

There are a range of support measures in place from both the Government and suppliers to help those in need. Check out this guide for more info.

Get in touch

What do you make of the proposed measures announced by the ESRI? We’d love to hear from you. You can contact us on Facebook, Twitter, and Instagram.