Irish consumers to see lower electricity bills as levy to fund renewable energy to fall 38%

Hard-pressed Irish households will see a fall in the PSO levy on their bills from October 1.

Irish households will have €24 added on to their electricity bills over the next year to help fund renewable energy projects and meet climate goals, the energy regulator has said.

The Commission for Regulation of Utilities (CRU) set out the final decision for the public service obligation (PSO) levy for 2025/26, which is shared across all electricity customers to help support projects such as wind and solar across the country.

“For the PSO year starting on 1 October 2025, the CRU has calculated that the monthly PSO levy will be €2.01 and €7.77 for domestic and small commercial customers, respectively,” it said.

“This compares to the current (2024/25) PSO levy, which is set to €3.23 and €12.91, and will result in a 38% and 39% decrease respectively.” 

While it is a decrease on the previous year, it comes as households continue to face strain on their finances, particularly when it comes to essentials like groceries and energy bills.

A flash estimate on inflation for July from the CSO earlier this week suggested the cost of food is rising at nearly three times the rate of general inflation.

When it comes to energy bills, a recent price hike announced by Flogas has raised fears other energy companies will follow suit heading into the winter.

It also comes ahead of this Government’s first budget, which has ruled out the kind of cost-of-living supports that marked previous years.

The PSO levy charged to customers each year is based on the wholesale price of electricity. When wholesale prices are higher, the PSO levy for households is lower because renewable energy generators are earning more for electricity they produce and do not require that level of subsidy.

During the huge surge in energy bills following Russia’s invasion of Ukraine, the PSO levy was set to zero.

However, households have begun to be charged more on their bills through the levy again, as wholesale prices have come down.

CRU said the levy supports significant amounts of renewable energy generation in Ireland, and the country “continues to make significant progress in advancing renewable energy”.

“The PSO levy is important in supporting clean energy and in helping Ireland meets its Climate Action Plan targets in 2030,” it added.