What is the outlook for energy prices?

After years of sky-high energy costs, many households are hoping for some relief with their bills. And with wholesale gas and electricity prices having eased hugely since the height of the crisis, it’s a fair expectation.

But when it comes to your actual bill, it’s not that simple.

A mix of levies, taxes, network fees and support credits — many outside of a household's control — also influence what we pay overall for our energy. Some are going down. Others look set to rise. And a few still hang in the balance.

So what does it all mean for our gas and electricity bills over the coming months? Are they set to rise or will they fall?

Let’s take a look at the good, the not-so-good, and the uncertain…

The good

You may be familiar with the PSO levy. 

This is a charge that the energy regulator, the CRU, places on all electricity bills to help support the renewable energy sector. 

For the present year the PSO levy is €3.23 ex. VAT a month or €3.52 a month including VAT at 9%.

From October the levy is set to fall to €1.94 a month, or €2.11 a month including VAT. So households can expect to save €1.41 a month or almost €17 a year. 

OK — so it's not a lot of money — but the levy has been as high as over €100 a year in the recent past so it could be a lot worse. 

Wholesale energy prices are also easing. However they still remain close to double what they were before the energy crisis broke out. So there's a limit to how far bills can fall — if at all. And as we explain below, falling wholesale prices could be outweighed by other rising costs.

The not so good 

Energy suppliers pay "network" fees to Eirgrid and ESB Networks, and Gas Networks Ireland for the upkeep of the electricity and gas networks respectively. 

As consumers, we don’t see these charges on our bills as they’re incorporated into the unit rate that we pay for our energy as well as the standing charge. But around 30% of the total cost of a household’s gas and electricity bill is made up of these network costs.

The CRU sets the amount that Eirgrid, ESB Networks and Gas Networks Ireland can charge suppliers each year based on detailed discussions with all relevant stakeholders. As with the PSO levy, the year runs from October to September.

For the 2025/26 year the CRU agreed on a tiny increase (€1.28 a year) in the network fees that Gas Networks Ireland can charge. The follows a near €60 increase last year. But it warned that the fees may have to increase significantly over the coming years. 

In August the CRU is also likely to propose another increase in network fees for the upkeep of the electricity grid. Last year it hiked fees which worked out at around €8.42 a month or just over €100 a year per household (though this year's hike isn't expected to be as big) and further increases are likely over the following years. 

It’s up to individual suppliers to determine how they pass on any increase in grid or network fees. They can absorb part or all of the hike themselves, increase their prices, or reduce their prices by a lower amount than they otherwise would have. But the upward pressure on grid fees means any potential fall in the wholesale price of gas and electricity over the coming months may end up not being passed on to consumers.    

A charge that definitely will be passed on to consumers is the carbon tax. This will increase yet again in the upcoming budget in October. It currently adds around €140 a year to the average gas bill. The increase in the upcoming budget will add another €20 or so. But the hike will likely be postponed until the start of next May as is customary.  

The uncertain      

To help with the cost of living crisis the Government reduced the rate of VAT on energy bills from 13.5% to 9% in May 2022. 

The measure was only meant to be temporary but it has been extended several times and is currently due to expire at the end of this October. 

At the moment it does look like the Government will retain the reduced rate — and this is something bonkers.ie has repeatedly called for — but it's not a certainty. And if the Government were to hike back up the rate of VAT, it would add around €65 a year to the average annual electricity bill and around €55 a year to the average annual gas bill. 

Another uncertainty is whether the Government will pay another round of energy credits to all households this winter.

Last winter the Government paid two energy credits worth €125 each. The winter before it paid three credits worth €150 each or €450 in total. And the winter before it paid three rounds of €200 credits, so €600 in total. These credits, coupled with substantial social welfare support, have helped shield households from the worst of the energy crisis.  

But with the Government under pressure to reign in rampant spending, and with huge uncertainty surrounding the impact of Trump's tariffs on the Irish economy, the Government has repeatedly said it won't be paying more energy credits this winter.  

So if the Government doesn’t pay any credits this winter, and hikes back up the rate of VAT, households may end up paying almost as much for their energy this winter as they did near the height of the crisis. So something to bear in mind...   

Switch and save on bonkers.ie

Regardless of what happens to energy prices over the coming months, you can ease the burden by switching supplier. Right now, suppliers are offering discounts of up to 30% or more to new customers. Meaning you could save hundreds on your energy bills in minutes.   

And the good news is that you can compare tariffs from all of Ireland’s energy suppliers and switch to a cheaper deal in just a few clicks on bonkers.ie.