What is the PSO levy?

How much is the PSO levy?

The Commission for Regulation of Utilities (CRU) sets the level of the PSO levy every year, which runs from 1st October until 30th September. 

The levy is currently zero for the 2023/24 period. Though it may go up again in the future.  

Every residential electricity customer is subject to the same charge, no matter how big or small their energy usage is.

​​The PSO levy is not applied to gas bills (although here there is the Carbon Tax).

Why do we pay the PSO levy?

Renewable energy projects in Ireland (like those in many other countries) are guaranteed a minimum price for the electricity they generate and the money collected from the PSO levy is used to help pay this guaranteed price when needed.

The idea is that paying renewable energy providers a guaranteed price will encourage financial backing for wind and solar farms, which can require large, upfront investment.   

The PSO levy was first introduced by the Fianna Fáil and Progressive Democrats coalition in 2010 and all subsequent governments have maintained the policy and the charge since.

The PSO levy on your bill

The PSO levy appears on all residential electricity bills and can usually be seen in the bill breakdown as a line under the Standing Charge and the number of kWhs for which you are being charged.

PSO levy history

Since the PSO levy was first introduced in 2010 it has fluctuated every year and has been as high as almost €105.

This is the second time the PSO levy has been zero. 

How is the PSO levy determined?

The amount that customers are charged for the PSO levy depends on a range of factors, the biggest of which is the wholesale price of electricity.

Because the main objective of the PSO levy is to promote and support the renewable energy sector in Ireland it has been determined that certain types of power generation e.g. wind and solar, should be protected from sharp market price fluctuations. In other words, they should be guaranteed a minimum price for the electricity they generate.

The scheme under which the price is set for wind farms to be paid is called the Renewable Electricity Support Scheme (RESS).

In general, if the wholesale price of electricity (also known as the SEM price) is high, less money is needed to subsidise renewable energy plants. That’s because they receive more money on the open market for the electricity they produce.

When wholesale prices are low, more money is needed to subsidise PSO-supported power plants because they make less money on the open market.

Thus when the wholesale price of electricity rises the PSO levy tends to fall and vice versa.

The fact that the levy is now zero shows how high wholesale prices have risen in recent months. 

Start saving on your electricity bills

Are you looking to reduce how much you’re paying on your electricity bills? 

Use our easy-to-use electricity comparison and switching service to discover what you could save by switching supplier today.

You can also adjust your everyday habits to reduce your bills. Check out these 16 ways to use less electricity and save money for some helpful tips.

And if you’re interested in reducing your impact on the environment and making your home more energy-efficient, why not take a look at these 12 ways to reduce your carbon footprint and save money?

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