CRU announces hike to the PSO levy on electricity bills

In a blow to energy customers still grappling with high energy prices, the energy regulator the Commission for Regulation of Utilities (CRU) has confirmed that the PSO levy will increase from October.

The new levy will be €3.23 ex VAT a month or €3.52 a month including VAT at 9%. However VAT is due to increase to 13.5% in October. 

At the moment electricity bills are still around 70% to 80% above pre energy crisis levels and are among the highest in the EU. So although the levy will only be just over €42 a year including VAT, it’s adding to bills at a difficult time.

How does the PSO levy work?

The PSO levy is a Government levy which is used to support renewable energy generation in Ireland. It's applied to all residential electricity bills and is set by the CRU each August for the following October to September period.

Under the PSO scheme, renewable energy operators are guaranteed a price for the electricity they produce. If the money they receive on the open market (the wholesale price) is below this guaranteed price, then the money raised from the PSO levy is used to top up the payment. 

The PSO levy is not applied to gas bills although here there is the carbon tax. This currently adds around €122 a year to the average gas bill and will increase again in the upcoming budget.

Recent PSO levy history

Last year the PSO levy was zero due to extremely high wholesale prices meaning no top up payment was needed for renewable operators. But as wholesale prices have eased slightly, this is no longer the case.  

Since the PSO levy was first introduced in 2010, it has been as low as -€89.10 (i.e. a credit to customers) to as high as almost €105 a year.

Read more

Last year Ireland successfully held its first ever offshore wind auction. But what does it mean for the consumer? And will it lead to lower electricity prices? Read our in-depth guide.

Looking to save?

Amid continued high energy prices, it's never been more important to be on the best deal for your gas and electricity.

The good news is that big savings are available to people who switch energy supplier. And switching is quick, easy and free on bonkers.ie.

Use our energy comparison service right now to compare gas, and electricity deals from all suppliers in Ireland.

And don’t forget, we can also help you switch and save across a wide range of other bills on bonkers.ie. Check out our broadband, banking, and insurance comparison tools to learn more.