How Much Is the PSO Levy?
Following a revised decision by the CRU, the PSO levy is significantly lower for the remainder of the 2025/2026 period.
Domestic customers will see their monthly charge reduced to €1.46 (excluding VAT) from the previous €3.23.
This change took effect on December 1st, 2025, and translates to an annual cost of €17.52 before VAT, or approximately €19.10 with the 9% VAT included.
This 55% reduction in the levy helps to partially offset rising network distribution costs on household energy bills.
Is There a PSO Levy for Business Customers?
Similar to the domestic rate, the PSO levy for businesses has decreased.
The amount a business pays depends on its Maximum Import Capacity (MIC), which is the maximum amount of electricity a business can draw from the network.
- For small commercial customers (MIC < 30 kVA): The new monthly charge is €5.65 (excluding VAT), a 56% reduction from the previous period's €12.91. This amounts to an annual cost of €67.80 before VAT.
- For medium/large commercial customers (MIC ≥ 30 kVA): The monthly charge is €0.70 per kVA (excluding VAT), down from the previous €1.57 per kVA.
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What Is The PSO Levy?
The Public Service Obligation (PSO) Levy is a tariff imposed on all electricity customers. Its goal is to help pay towards Ireland's renewable energy objectives and is included as an extra tax along with electricity VAT.
The PSO levy is important because it helps the investment in renewable energy and allows for renewable energy producers to receive a guaranteed minimum price.
This is vital since renewable energy is a volatile business venture, and having a guaranteed price allows for Ireland's renewable energy market to remain stable.
The PSO levy is charged to all electricity customers. It is applied directly to your electricity bill and is paid over the course of the year.
How Does the Government Work Out the PSO Levy?
The government sets the level of the PSO levy each year, either increasing or decreasing it accordingly.
The biggest factor that determines how much energy customers are charged is the wholesale price of electricity.
In simple terms, the higher the price of electricity, less money is required to subsidise the generation of renewable energy.
If prices fall, the inverse effect occurs and the PSO levy increases to offset the lost revenue in the generation of renewable energy.
The PSO levy was first introduced in 2010 and in the table below you can see how it has fluctuated in amount in the following years, reaching over €100 in 2017.
| Period | Amount (Inc. VAT) |
|---|---|
| 2010 - 2011 | €37.18 |
| 2011 - 2012 | €21.93 |
| 2012 - 2013 | €31.60 |
| 2013 - 2014 | €48.62 |
| 2014 - 2015 | €73.00 |
| 2015 - 2016 | €68.24 |
| 2016 - 2017 | €80.36 |
| 2017 - 2018 | €104.74 |
| 2018 - 2019 | €47.40 |
| 2019 - 2020 | €38.68 |
| 2020 - 2021 | €88.80 |
| 2021 - 2022 | €58.57 |
| 2022 - 2023 | -€97.98 |
| 2023 - 2024 | -€97.98 |
| 2024 - 2025 | €38.76 |
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Is the PSO Levy Reduction the Only Government Help?
In Budget 2026, the government shifted away from universal electricity credits to focus on long-term tax measures and targeted supports:
- VAT Extension to 2030: The 9% reduced VAT rate on electricity and gas, which was due to expire, has been extended until December 31st, 2030. This prevents an automatic 4.5% increase in bills that would have occurred if the rate returned to 13.5%.
- Fuel Allowance: The Fuel Allowance was increased by €5 per week in Budget 2026. Furthermore, from March 2026, eligibility has been expanded to include those receiving the Working Family Payment.
Unlike previous years, there are no universal €250 electricity credits for the 2025/2026 winter season, as the government has pivoted toward permanent VAT reductions instead of one-off payments.
How Else Can I Decrease My Energy Bills?
Even with the PSO levy reduction, you can still take action to decrease your own energy bills through energy efficient measures or by switching provider. Since many suppliers offer discounted rates to new customers, switching can often save households over €400 per year. You can also look into getting a smart meter to take advantage of cheaper electricity with a time-of-use or dynamic tariff.
Frequently Asked Questions About the PSO levy
As of 2026, the PSO levy is not in a refund state. While it was zero or "negative" in 2022/23, it is currently a charge of €1.46 (ex. VAT) per month for domestic customers.
No, the PSO Levy is only applied to electricity bills. Gas customers pay a Carbon Tax, which increased to €71 per tonne in Budget 2026.