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 2022/23 period, down from just under €60 last year. 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).

On top of this, a credit or rebate of €89.10 for the year is being paid to households under the PSO scheme, as the extra profits earned by wind farms as a result of record electricity prices are partly distributed back to consumers.  

Why do we pay the PSO levy?

The PSO levy was introduced by the Fianna Fáil and Progressive Democrats coalition in 2010 to support investment in renewable electricity and indigenous sources of energy, and all subsequent governments have maintained the policy and the charge.

The money collected from the PSO levy is now solely used to support the renewable energy sector in Ireland (having previously been used to support the peat sector too).

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 each year and been as high as almost €105.

This is the first time the PSO levy has been zero or negative. 

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 money is now being paid from the PSO scheme to households shows how high wholesale energy 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 to help offset the PSO levy charge? 

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 15 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?

Get in touch

If you have any questions regarding the PSO levy, we’d be happy to help!

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