What is the PSO levy?

Daragh Cassidy

Head Writer

The PSO levy, or Public Service Obligation levy, is a Government levy that is charged to all electricity customers in Ireland. The money collected from the PSO levy is now used solely to support the renewable energy sector in Ireland (having previously been used to support the peat sector too).

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 €78.24 (ex VAT) or €88.80 (inc. VAT) for the 2020/21 period, which works out at just under €15 on every household's bi-monthly bill.

Every domestic electricity customer pays this charge.

The PSO levy on your bill

The PSO levy appears on all domestic 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 fallen four times - in 2011, 2015, 2018 and 2019.

The PSO levy is currently €88.80 for the 2020/21 period, which is the second highest it has ever been.

The CRU has proposed a 29.5% reduction in the levy to just under €63 a year for the upcoming 2021 to 2022 period, with a final decision due by 1st August. 

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 fluctuations.

In general, if the wholesale electricity price (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.