Budget 2025 Ireland: What Will It Mean For My Energy Bills?
Budget 2025 Ireland will be delivered on the 1st October 2024 with at a projected cost of €8.3bn. While it is yet unknown if energy bills will be subsidised again for the forthcoming year, up to €4.5bn has been set aside to help deal with the cost of living crisis and increase in inflation, indicating that there may be some measures introduced to help homeowners with their energy bills.
What Do We Know About Budget 2025?
While the specific details in terms of spending allocation are yet to be announced, as part of their Summer Economic Statement before the summer recess, the government signed off on the projected spending for the forthcoming budget in October 2024 indicating that it would be worth €8.3bn.
A breakdown of the proposed spending is:
- Tax cuts €1.4 billion
- New spending €6.9 billion
Minister for Finance, Jack Chambers, cautioned the public as part of his statement that this year's budget would not be a "giveaway" as it had been in previous years when dealing with the immediate impact of the Covid-19 pandemic and severe rise in the cost of living.
The flash inflation rate for June is 1.5% and that gives a different context to any further interventions or supports. If there are additional supports when it comes to the cost of living, it won't be of a scale near to what it was in previous years. There needs to be balance in the need to support people during a cost of living crisis and the need for prudent fiscal spending. - Minister for Finance, Jack Chambers.
Source: RTE
Will Budget 2025 Help With Energy Costs?
Last year, a considerable chuck of the Budget 2024 went towards helping people deal with the energy crisis.
With the crisis abetting slightly, energy suppliers are now dropping their electricity prices and there may be less need for such drastic measures as there had been in previous years.
In addition to this, the rate of inflation in Ireland has dropped to 2.38% in 2024 after reaching almost 9% in 2022.
Despite these decreases, Irish households are still paying much more for their energy than they were previous to 2020 and as such, you would expect the government to continue to provide funding to help with these costs.
At the moment we can only speculate based off of budgets from previous years along with the information available to us at this time about Budget 2025.
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Will There Be Another Electricity Credit Payment in Budget 2025?
The €450 electricity credit payment proved very popular with homeowners, and it is difficult to see the government opting to remove this in Budget 2025 given the sustained high cost of energy in Ireland.
The credit payment worked as following:
- It provided a total of €450 discount towards each household’s electricity bill
- It was only for domestic electricity customers
- It affected 2.1 million homes in Ireland
- The payments were managed by the Department of the Environment, Climate and Communications and ESB Networks.
- The energy providers applied the credit to each of their customers.
- The Commission for Regulation of Utilities (CRU) oversaw the roll-out of the scheme.
- The scheme also applied to Pay-As-You-Go accounts.
- The programme did not apply to gas meters or gas accounts.
The scheme applied to anyone with an electricity contract and was paid out in three instalments:
- First payment was made in December 2023
- Second payment was made in February 2024
- Third payment was made in April 2024
Whether the government chooses to include a similar scheme for Budget 2025 remains to be seen, but we can speculate that there will be some financial package available to homeowners to help manage their energy bills.
How Did Budget 2024 Help With Energy Costs?
By looking at Budget 2024 and what it did for energy costs, we can possibly get an insight into how Budget 2025 will deal with the same issues.
As part of the Budget 2024 spending plan to help households with their energy costs, the following were introduced:
- Electricity Credit
Each domestic electricity customer received a €450 electricity credit payment that was paid out in three instalments until April 2024. - Fuel Allowance
More people qualified for the fuel allowance, and people who were already receiving got another once-off payment of €300 during the last quarter of 2024. There were also other options for vulnerable people who were struggling with their electricity bills. - VAT
The 9% VAT rate that was set to increase back up to 13.5% remained at 9% on electricity for another 12 months. - Incentives for Renewable Energy
In order to incentivise Ireland's push to reduce our carbon emissions, the VAT for new solar panel installations was reduced to 0% from 1 January 2024.
Can I Have My Electricity Credits Back Paid?
The payment was an automatic deduction from your electricity bill and given that the last payment was in April 2024, it is now not possible to have any missing credits back paid. If you believe that you did not correctly receive your credits, contact your supplier.
Have Energy Costs Come Down in Ireland in 2024?
While the cost of electricity in other EU nations has reduced over the last year, electricity prices in Ireland remain very high.
The latest figures from Eurostat indicate that Ireland's electricity prices have increased by almost 70% since 2020 from €0.2616/kWh to €0.4437/kWh in late 2023 making Ireland's electricity the highest across the EU.
Source: Eurostat
Last Updated: July 2024
As of July 2024, the average annual electricity bill for an Irish home is €1,374 on a standard rate, 24hr urban price plan.
Given the sustained high cost of energy in Ireland and the financial pressure it puts on households, it is probable that Budget 2025 will contain some type of relief package similar to that in Budget 2024 to help reduce this cost in particular during the colder winter months when these energy schemes are most necessary.
What Can I Do To Reduce Electricity Costs Before Budget 2025?
While government initiatives and spending plans are a much welcomed aid in dealing with high energy costs, there are steps you can take as an individual to help reduce your electricity bills.
- ⚡ How To Reduce Your Electricity Costs
- Switch energy suppliers every 12 months to avail of discounts and introductory offers.
- Study the market to see who is the cheapest electricity supplier.
- Retrofit your home with the help of SEAI grants.
- Learn more about energy consumption in your home and adopt more energy efficient habits.
- Invest in renewable energy sources such as solar panels to offset your energy costs.
- Install a heat pump to reduce heating costs.
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