PSO Levy increase will add €50 to Annual Electricity Bills

An increase to the PSO levy is taking place in October this year.
The increase will mean an additional 50 a year on all household electricity bills (including VAT).
This 130% increase to the PSO levy will kick in from October 1st 2020.

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 PSO levy is currently €2.84 a month (ex VAT)  which is €36.68 a year including VAT.

It will rise to €6.52 a month from October 1st 2020. This is an increase of €3.68 a month or 130% . VAT is charged on the PSO levy at a rate of 13.5%, bringing the monthly amount to €7.40.

The total annual PSO Levy per electricity customer from October 2020 will be €88.80 inclusive of VAT . Increased by €50 from 2019

You will see the PSO Levy on your electricity bill as €13.04 (€6.52 x 2 on a typical 2-monthly bill).

With rising electricity bills on the way –  you should take a look at our comparison of Electricity providers deals .
You could easily cut your electricity bill by over €250 in one year.


History of the PSO Levy

The PSO levy was reduced in 2018 and 2019 – therefore the levy in 2020 will be lower than it was in 2017.

As you can see from previous articles on the PSO Levy –   it will have 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 of €1013 a year – the PSO levy will make up 8.7% of the bill from October 2020.
For a smaller household with an annual electricity bill of €609 – the PSO levy will be a much larger proportion (14.4%) of the total bill.

The Carbon Tax is another extra charge on fossil fuels – read more about Carbon Tax in Ireland

PSO Levy Government Information

4 thoughts on “PSO Levy increase will add €50 to Annual Electricity Bills

  1. 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.

  2. 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.

  3. Demanding the same PSO from all customers is madness and does nothing to encourage a reduced carbon emission, whoever made the decision to charge every electricity provider the same PSO levy, should reconsider and use common sense – or better resign from office due to gross incompetence.

    I switched from an electricity provider who burns fossil fuel to a 100% green energy provider, all my electricity is coming from solar or wind. Even to pay a higher unit price was acceptable for me in order to reduce my carbon footprint. I believe a truly green electricity company is doing everything right by eliminating CO2 emissions and help the country to achieve emission goals. It is, therefore, an unreasonable punishment that green companies have to pay the same PSO levy as dirty fossil-fuel burning companies, who failed to switch to renewable energy.
    The green electricity providers and their customers should be rewarded by not being charged any PSO levies.

    I challenge the statement in the published Decision Paper regarding the 2020/21 Public Service Obligation Levy. “The CRU emphasises that savings on the variable aspect of the electricity bill can be gained through switching electricity supplier and through energy efficiency.”

    Whoever made that statement should answer an utmost important question:
    What is the incentive for a dirty company to invest in eco-friendly technology and sell only renewable energy if they don’t have to pay significantly more than green companies?”
    All electricity providers impose the same PSO levy on their customers, therefore switching to a green provider doesn’t help to reduce PSO levy, it can be actually more expensive to go green because dirty electricity is cheaper than clean energy.

    Additional to buying only green electricity, I also invested almost 20K Euro into a home solar system with a battery, using the purchased electricity only as a backup or during winter months if I have insufficient own production.
    I wonder how many of the Commission for Regulation of Utilities who decided to punish clean energy providers by imposing an unfair and unjust PSO levy on them and their ecological-conscious customers, can say the same and how many are bigots still buying cheap, dirty electricity?

  4. 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.

Comments are closed.