NEWS: The Public Service Obligation levy was reduced in Autumn 2022.
What is The PSO Levy ?
The PSO Levy (Public Service Obligation) is a charge that all electricity customers in Ireland have to pay. It helps to cover the costs associated with producing sustainable and renewable energy in Ireland.
The levy is charged to all electricity customers with suppliers collecting the levy through bills. The PSO levy is currently €4.30 excluding VAT per month which equates to €51.60 a year or €58.57 per year inclusive of VAT.
In 2022 there will be a negative PSO Levy for the first time. This means that comsumers will get money off their electricity bills. See more here about PSO Levy Refund . The negative PSO levy this year is because of the new RESS renewable support scheme, which means that renewable energy generators have to return market revenues above a certain level to Levy customers.
From October 2023 – the PSO levy will be Zero
Tip – you should take a look at our comparison of Electricity providers deals .
You could cut your electricity bill by over €800 in one year.
History of the PSO Levy
The PSO levy was reduced in 2018 and 2019 – therefore the levy in 2020 was lower than it was in 2017.
As you can see from previous articles on the PSO Levy – it has risen from €19.33 in 2011.
All domestic electricity customers are charged the PSO levy at the same flat rate – regardless of how much electricity is used. This means that a single person will pay the same PSO levy as a large family using much more electricity.
There have been suggestions that the PSO levy should be based on a percentage of electricity usage. This would be fairer and higher usage would mean a higher PSO levy.
The government say this can’t be done because of EU rules. Apparently, this is because levies tied to consumption that helps Irish energy producers can’t be applied to imported electricity too.
For an average electricity bill – the PSO levy in 2020 made up about 3% of the annual bill.
For a smaller household with half the average electricity bill – the PSO levy was a much larger proportion (6%) of the total bill.
The Carbon Tax is another extra charge on fossil fuels – read more about Carbon Tax in Ireland
This is totally unacceptable – at present the consumer pays approximately 48% on top of the power they use. This 48% is charged on the following:
VAT
Standing Charge
PSO levy.
The cost for the installation of green renewable energy has come down significantly and the PSO levy should in fact track the reduction in the installed cost not the subsidies the government bodies have been able to negotiate with the providers.
The cost was $135 per megawatt-hour in 2009 and was $59 in 2014. It is still falling!
It seems the consumer is paying for the weakness in government negotiations with these investors. Its time to raise this issue with the electricity regulator and show your dissatisfaction.
There goes the household two monthly help with bills.
130per cent. Are they gone mad on days of rising unemployment and economic disaster.
With the greens wanting increase in diesel petrol turf car tax we might as well lie down and die or put us all on TD salary rates. Back to the fifties shortly.
Checked with Clare Daly MEP and applying a PSO Levy based on Usage is NOT prohibited by the EU. she got this reply to her enquiry:
“Thank you for your email of 21 September regarding the Irish renewable energy support scheme (RESS) and the ‘public service obligation (PSO) levy’ through which it is financed.
The Commission can confirm that the State aid decision in case SA.54683 on the RESS does not prohibit Ireland from applying a PSO levy based on usage.
Please note that if Ireland intends to modify the PSO levy so that the cost recovery favours certain energy consumers over others, then this may involve State aid, which would need to be separately assessed by the Commission.”
So, the question is what would be a fairer system? Usage based also hurts poorer tenants who have old storage heating and no means to implement any improvements / landlords who don’t care.
I asked Mark Blyth, an economist and he answered:
“……But flat charges are always regressive, like a flat tax. The way we deal with this traditionally is a rebate based upon income/age/ownership, or the charge is scaled up front by size of the property (the old rates system).
Neither is foolproof, but its better than a flat charge – like the UK community charge mess/poll tax.”
I suggest we email our TDs and ask for a fairer implementation than a flat rate going forward. My fear is the improvement will be worse than the existing system (camel = horse designed by committee)….! Hope this helps.