Budget 2026 Ireland: Key Takeaways for Electricity Customers
Below are the main announcements from Budget 2026 affecting Irish electricity customers:
- No New Energy Credits: An end to broad, one-off energy credits (such as the €250 credits from the previous year) in Budget 2026.
- Increased Funding for Energy Efficiency/Retrofitting: The budget includes substantial focus on reducing long-term energy costs through efficiency.
- Rise in the Carbon Tax: This will lead to increased cost of fossil fuels such as natural gas, petrol, and diesel.
- VAT on Electricity to Remain at 9%: The lower rate of VAT on electricity bills will remain in place until December 31, 2030.
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Budget 2026 Ireland: What Will Be Announced?
Based on recent reports and government statements, it is unlikely that there will be a new round of universal electricity credits as part of Budget 2026.
The Taoiseach has indicated that the government does not plan to introduce another broad "cost-of-living package" in Budget 2026, which would include measures like the energy credits. The previous credits were considered temporary measures to address exceptionally high energy prices.
The government's decision is based on a significant and consistent fall in consumer price inflation.
While universal credits are not anticipated, the government has stated that it will give full consideration to the inflationary outlook and will continue to support households through other mechanisms, such as changes to social protection and tax structures.
"We're not going to have a cost-of-living package this year, that's the Government view. We will endeavour through the budget, through the various mechanisms we have from social protection to tax, to help people."
- Taoiseach Micheál Martin, March 2025
There will be a focus on "more targeted measures" potentially including:
- Expanded Fuel Allowance: Increasing the amount of the fuel allowance and potentially broadening the eligibility criteria to include more households struggling with energy costs.
- Targeted Payments: Providing specific payments to vulnerable groups, such as those receiving the Living Alone Allowance or other social welfare benefits.
- Enhanced Retrofitting Grants: Continuing and improving SEAI grants for home retrofitting to make homes more energy-efficient, with a particular focus on low-income households and renters.
- Community Energy Support: Funding for local, community-based services that offer advice and assistance to households on managing energy consumption and accessing grants.
- Structural Reforms: Addressing underlying issues in the energy market, such as ensuring that all large energy users pay their fair share of infrastructure costs.
- Long-term Investment: Committing to sustained investment in renewable energy sources and the national grid to reduce future energy costs and enhance energy security.
It is important to note that Budget 2026 is still in the planning stages, and while the current indications are against new electricity credits, the final details will be announced later in the year.
Have Energy Costs Come Down in Ireland in 2025?
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.
As of March 2026, the average annual electricity bill for an Irish home is €1,800 on a standard rate, 24hr urban price plan.
PSO Levy
The PSO Levy for 2024/25 increased from zero to €3.23 (excluding VAT) per month, or €38.76 per year for household customers.
The subsidy is charged to all electricity customers in Ireland to support electricity generation from sustainable and renewable sources and given the falling price of wholesale electricity, the CRU has decided to raise the levy to maintain this financial support.
Carbon Tax
The rate of carbon tax levied on fossil fuels increased by €7.50 to €63.50 per tonne of carbon dioxide emissions as part of measures announced in Budget 2025.
This increase adds €16.86 to a typical annual gas bill.
Network Charge Increases
It was announced last year that network charges for electricity would increase, as set out by the CRU.
These charge increases are expected to add €8.42 per month to domestic electricity bills, or €101.04 per year.
It is hoped that providers will lower unit prices to absorb the cost of these increases rather than pass them on to their customers.
What Were The Energy Credits in Budget Ireland 2025?
The €250 electricity credit was paid in 2 instalments of €125 over the winter months:
- December
- March
The credits were part of an overall package designed to help homeowners manage the cost of living crisis and rising energy bills, with winter months in particular putting a financial strain on homes due to high heating costs.
The credits were automatically applied to energy bills by suppliers and also applied to those on PAYG meters.
The credits were less than in 2024 when homeowners received a €450 electricity credit which was paid out over three months from late 2023 into early 2024.
Were There Credits for Gas Customers?
No. There were no credits available for residential gas customers, with gas bills in fact rising due to the increase in the Carbon Tax.
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Was There More Help With Energy Costs in Budget 2025 Ireland?
In addition to the new electricity credit, as part of the Budget 2025 spending plan to help households with their energy costs, the following were introduced:
- Fuel Allowance - More people could qualify for the fuel allowance, and people already receiving it got another once-off payment of €300 in December 2024.
- VAT - The 9% VAT rate on energy was maintained.
- Living Alone Allowance - An additional €200 was paid to recipients of the Living Alone Allowance.
Those who qualified for additional payments are also entitled to the €250 electricity credits, meaning it was possible to make savings of over €500.
What Can I Do To Reduce Electricity Costs?
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.