CRU announces further cut to the PSO levy on electricity bills

Head Writer

The energy regulator has announced that the PSO levy will fall even further from December, providing a small reprieve to hard-pressed households.

Energy customers will be happy to know that the energy regulator, the Commission for Regulation of Utilities (CRU), has announced that the PSO levy will decrease even further from 1st December.

In late July, the CRU had calculated that the levy would fall from €3.23 to €2.01 a month excluding VAT for the upcoming PSO period, which runs from 1st October to the end of the following September every year.

But the CRU has discovered that it got its original figure wrong as a result of inaccurate information that was provided to it as well as an error in its calculations the first time around. So the regulator has now announced that from 1st December, the levy will fall even more to €1.46 a month or €1.59 including VAT at 9%.

This means households will now save just over €23 a year compared to last year.

Prices still high

Obviously, it’s good to see the levy go down even further, and not up. Especially as households are unable to avoid this charge no matter how much or how little electricity they consume. And every little helps as they say...

But this further reduction isn’t going to make a huge difference to people’s bills, especially as many suppliers increased their electricity prices this month which will see the average electricity bill for affected customers go up by around €200 a year.

And on top of this, the recent Budget saw the removal of energy credits for households. So we'll all be paying a lot more for our energy this winter.

How does the PSO levy work?

The PSO levy is a Government levy which is used to support renewable energy generation in Ireland. It's applied to all residential electricity bills and is set by the CRU each August for the following October to September period.

Under the PSO scheme, renewable energy operators are guaranteed a price for the electricity they produce. If the money they receive on the open market (the wholesale price) is below this guaranteed price, then the money raised from the PSO levy is used to top up the payment.

The PSO levy is not applied to gas bills although here there is the carbon tax. This currently adds around €140 a year to the average gas bill and will increase again in the upcoming budget.

Recent PSO levy history

Since the PSO levy was first introduced in 2010, it has been as low as -€89.10 (i.e. a credit to customers) to as high as almost €105 a year.

Although the levy is much lower than some previous years, this is largely because wholesale electricity prices remain so high, so less money is needed to support wind farms around the country. And high wholesale prices mean higher bills for households — so it's somewhat of a Pyrrhic victory for consumers.

Period	Monthly Cost (ex. VAT)	Monthly Cost (inc. VAT)	Annual Cost (ex. VAT)	Annual Cost (inc. VAT)
2017 - 2018	€7.69	€8.73	€92.28	€104.74
2018 - 2019	€3.48	€3.95	€41.76	€47.40
2019 - 2020	€2.84	€3.22	€34.08	€38.68
2020 - 2021	€6.52	€7.40	€78.24	€88.80
2021 - 2022	€4.30	€4.88	€51.60	€58.57
2022 - 2023	€0	€0	-€89.10	N/A
2023-2024	€0	€0	€0	€0
2024-2025	€3.23	€3.52	€38.76	€42.25
2025-2026	€1.46	€1.59	€17.52	€19.10

The PSO levy is used to support renewable energy — largely from wind farms. And in 2023, Ireland held its first-ever offshore wind auction. But what does it mean for the consumer? And will it lead to lower electricity prices? Read our in-depth guide.

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CRU announces further cut to the PSO levy on electricity bills