The country's biggest energy supplier is cutting its prices for the second time in four months as well as offering up to €225 cashback to new customers.
Electric Ireland is the latest energy supplier to cut its prices.
The country's biggest energy supplier is cutting its electricity prices by 8% and its gas prices by 7% from 1st March.
It's also decreasing its standing charges by the same amount. And when both reductions are taken into account the average household will save around €153 a year on their electricity and €111 a year on their gas.
It's the second time Electric Ireland has reduced its prices in just four months. It only last decreased its prices in November when it cut its electricity prices by 10% and its gas prices by 12%. That reduction saved customers around €212 a year on their electricity and €216 on their gas.
As well as this the supplier is offering a great cashback deal to new customers to entice them to switch. But more on that in a bit...
Why are prices falling?
Over the past year or so wholesale gas and electricity prices have fallen significantly and this drop is now being passed on to consumers.
Wholesale prices are falling largely due to a decrease in the price of gas. A mild winter has meant that gas use has been lower than normal in most of Europe and therefore storage levels are high. Which is good for keeping prices under control. And Europe has been receiving lots of shipments of liquified natural gas to replace the Russian piped gas that was banned following its invasion of Ukraine, which then sparked the energy crisis.
And as we use gas to generate around 40% to 50% of our electricity, this also helps reduce our electricity prices. Strong wind output has helped keep a lid on electricity prices in recent months too.
However wholesale prices are still close to double normal levels.
Prices still high
Although today's announcement is obviously good news, we need to remember that it comes on the back of some hefty price increases from Electric Ireland, and indeed all suppliers, over the past two years.
Even after today’s reduction, Electric Ireland’s second in just a few months, its electricity prices remain around 85% above where they were in 2020 before Covid and then the war in Ukraine wreaked havoc with energy prices while its gas prices are still over double previous levels.
Yes, prices are falling, but they’re falling from really high levels. So it’ll still be a very expensive winter to heat and light our homes. And of course this price cut doesn’t come into effect until 1st March.
Will prices fall further?
If wholesale gas and electricity prices remain close to where they currently are, then barring another economic shock of some sort, it's very likely we’ll see a third price decrease from Electric Ireland of around 10% to 15% in the second half of the year.
However that would still leave prices around 40% to 50% above what would, until recently, have been considered normal levels.
Nevertheless, it does look like there is finally light at the end of the tunnel for consumers and the worst of the energy crisis seems to have passed.
We are pleased to announce a further reduction in energy prices for our customers today. We are acutely aware of the pressure many of our customers continue to experience due to the impact of international events and the energy crisis over the last two years. Following a reduction of 10% in electricity and 12% in gas prices last November, today’s announcement will deliver further reductions for our customers, resulting in a decrease of 17.2% in electricity and 18.2% in gas prices within a four-month period.
Pat Fenlon, Executive Director, Electric Ireland
Get up to €225 cashback as a new customer with Electric Ireland
As well as the reductions outlined above for its existing customers, Electric Ireland is offering further discounts and cashback to new customers who switch to the supplier.
Right now new customers can get €150 cashback when they switch their electricity and a whopping €225 cashback when they switch their gas and electricity to Electric Ireland.
Plus for 12 months you'll get a further 14% discount on your electricity for example.
The Government has committed to keeping the reduced rate of VAT on gas and electricity bills until October.
And it is currently paying another round of energy credits, which households should have started seeing hit their electricity accounts before Christmas.
For its part, Electric Ireland says it continues to provide a range of initiatives to support customers who are struggling to pay their bills such as its €5 million Hardship Fund.
Electric Ireland also provides several flexible payment options, including an 'equaliser' product that allows customers to spread their energy costs in equal payments across the year or to take a payment holiday by agreeing a plan to pay their bills over 11 months instead of 12. So reach out to Electric Ireland if energy costs are a concern for you and as it will work with you to put a manageable payment plan in place.
In the meantime, to help you cope with high energy prices, here are 16 ways to use less electricity and save money.
And if you're struggling to pay your energy bills, here are a range of other supports that are available.
Switch and save on your energy costs
If you’re looking to save money on your energy bills, why not switch to a cheaper supplier?
Even though prices are dropping, you can save even MORE money by switching as suppliers are offering big discounts to new customers.
Head over to our energy comparison page to review the options available to you.