The short version: the PSO levy is a flat, CRU-set charge on every domestic electricity account that funds Government renewable-energy support schemes. It is €1.46/month ex VAT (€1.59 with 9% VAT) until 30 September 2026, then falls to €0.51/month ex VAT (about €0.56) for the year to 30 September 2027 — a 66% cut that happens automatically. Every supplier charges the identical amount; it is not on gas bills; and it is not the carbon tax.
What is the PSO levy and what does it fund?
PSO stands for Public Service Obligation. It is a charge the Government requires every electricity supplier to collect from every final electricity customer in Ireland, and its job is to fund the state's renewable-electricity support schemes — the contracts (REFIT and, more recently, RESS) that guaranteed wind and solar generators a minimum price so the projects would get built. When the market price of electricity is below a generator's guaranteed price, the PSO pot tops up the difference. Peat-generation supports were also funded through it historically; today it is, in practice, the renewables line on your bill.
The CRU — the Commission for Regulation of Utilities — does the sums. Every summer it calculates how much money the schemes need for the levy year ahead, which runs 1 October to 30 September, and divides the pot across three customer categories: domestic, small commercial, and medium/large commercial. The CRU has no discretion over the schemes themselves — those are Government policy — it just calculates the number and makes sure every supplier collects it. The decisions are published on cru.ie.
Three properties of the levy follow from that design, and they answer most of the questions people bring to it. It is flat — a fixed euro amount per domestic account, no matter how many units you use. It is universal — the same figure on every supplier's bill, bill pay or prepay, urban or rural. And it is electricity-only — there is no PSO line on a gas bill. Where it sits on your paper bill and how it interacts with the other lines is covered in our electricity bill explainer.
How much is the PSO levy right now?
Two numbers matter in 2026, because the levy year turns over on 1 October and the CRU has already published both sides of the line. Note the VAT wrinkle: the CRU sets the levy excluding VAT, and your bill then adds VAT at 9% — the reduced rate that applies to residential energy until at least 31 December 2030 — so the figure you actually pay is slightly higher than the headline.
| Levy period | Per month (ex VAT) | Per month (inc 9% VAT) | Per year (inc VAT) |
|---|---|---|---|
| Now → 30 Sep 2026 | €1.46 | €1.59 | ≈ €19.10 |
| 1 Oct 2026 → 30 Sep 2027 | €0.51 | €0.56 | ≈ €6.67 |
The same two years as a picture — the annual cost of the levy for a domestic account, VAT included:
For scale: the CRU's typical domestic customer uses 4,200 kWh a year, and on any current tariff that is a four-figure annual bill. The PSO levy is around 1–2% of it now and under 1% from October. It is worth understanding — it is not worth planning around. The lines that decide whether your bill is dear or cheap are the unit rate and the standing charge, and those are the ones a switch changes.
What happens on 1 October 2026?
The 66% cut, automatically: from 1 October 2026 the domestic PSO levy falls from €1.46 to €0.51 a month ex VAT — about €0.56 with VAT, or roughly €6.67 over the 2026/27 levy year. You do not need to ring anyone, switch anything or claim anything: every supplier must apply the new rate to every domestic account from the same date. If your billing period straddles 1 October, the bill simply pro-rates the two rates across the days.
Keep the saving in proportion, though — it is about €12.40 a year. If your 12-month discount is expiring around the same time, the year-2 price jump will move your bill by twenty times that, in the wrong direction.
The cut was confirmed when the CRU approved the 2026/27 levy alongside the year's network charges: the total pot suppliers must collect falls from about €125 million to about €41 million, and every customer category gets the same 66% reduction — small commercial accounts drop to €1.93 a month, and medium/large commercial sites to €0.24 per kVA. Domestic households are the €0.51 line.
Why does every household pay the same PSO levy?
Because the CRU levies it per domestic account, not per unit of electricity. The domestic share of the pot is divided across the country's domestic accounts, and everyone pays an identical flat amount. There is no low-user discount, no high-user surcharge, and no supplier variation — which makes it unique on the bill. Here is what that means in practice across three very different homes:
| Household (illustrative usage) | PSO to 30 Sep 2026 | PSO from 1 Oct 2026 |
|---|---|---|
| One-bed flat, ~2,000 kWh/yr | €1.59/month — ≈ €19.10/yr | ≈ €0.56/month — ≈ €6.67/yr |
| Typical home, 4,200 kWh/yr (CRU typical usage) | €1.59/month — ≈ €19.10/yr | ≈ €0.56/month — ≈ €6.67/yr |
| Large all-electric house, ~8,000 kWh/yr | €1.59/month — ≈ €19.10/yr | ≈ €0.56/month — ≈ €6.67/yr |
Yes — the bedsit and the mansion pay the same, to the cent. Whether that is fair is a policy argument rather than a billing one; the practical takeaway is that low-usage homes feel flat charges hardest as a percentage of their bill. If that is you, the levy is the least of it — the standing charge is the flat cost that actually moves your total, and our low-usage ranking weighs it properly. The flat design also means a smart meter, a NightSaver meter or a green tariff change nothing about your PSO line: 100% renewable plans pay the same levy as everyone else.
Why does the PSO levy go up and down so much?
Because it is a top-up, and the size of a top-up depends on what the market is already paying. Supported renewable generators are guaranteed a price for their output. When wholesale electricity prices are low, the gap between market earnings and the guaranteed price is wide, the schemes need a lot of topping up, and the levy is high. When wholesale prices are high, the gap narrows or vanishes — and under the newer RESS scheme the flow can even reverse, with generators paying money back into the pot when the market pays them more than their contracted price.
Two other mechanics add to the swing. Each year's levy includes a reconciliation (the CRU calls it the R-factor) that trues up the forecasts of two years earlier against what actually happened — so a bad forecast in one year echoes into the levy two years later. And the CRU can revise a levy mid-year if the data demands it, which is exactly what happened in December 2025 when the 2025/26 figure was cut from €2.01 to €1.46 a month. The result is a charge that has swung from record highs to zero to negative and back inside a decade — which is why any article quoting "the" PSO levy without a date is quoting a number that may already be dead.
What has the PSO levy been in previous years?
The recent history is genuinely odd, and it makes the point about wholesale prices better than any theory. Domestic monthly amounts, ex VAT, from the CRU's decisions:
| Levy year (1 Oct – 30 Sep) | Domestic PSO (ex VAT/month) | What happened |
|---|---|---|
| 2022/23 | Negative — a PSO payment | High wholesale prices flipped the scheme: renewable generators owed money back, so customers received a PSO payment instead of paying a levy. |
| 2023/24 | €0.00 | The CRU set the levy to zero — wholesale prices were still high enough that no support top-up was needed. |
| 2024/25 | €3.23 | The levy returned as wholesale prices fell back and a reconciliation from earlier years fell due. |
| 2025/26 | €2.01, cut to €1.46 from 1 Dec 2025 | Set at €2.01 in the original decision, then revised down mid-year after the CRU reviewed updated scheme data. |
| 2026/27 | €0.51 | A 66% cut, from 1 October 2026 to 30 September 2027. The whole pot shrinks from about €125 million to about €41 million. |
Read bottom to top and it is a tidy story: the energy crisis sent wholesale prices so high that in 2022/23 the scheme ran backwards and paid customers; 2023/24 was set to zero; the levy returned at €3.23 as prices normalised; and it has been cut in every decision since. Read it as a customer and the moral is simpler: the PSO is not a number to memorise. Check the current figure on cru.ie when it matters, and expect the line on your bill to change every 1 October.
Is the PSO levy the same thing as the carbon tax?
No — and this is the mix-up we see most often, because both are Government-driven lines that appear on energy bills and neither can be switched away. They are close to mirror images:
| PSO levy | Carbon tax | |
|---|---|---|
| Which bill | Electricity only | Natural gas only (as a bill line) |
| How it is charged | Flat € per account per month | Per kWh of gas you burn — scales with usage |
| Who sets it | CRU, per levy year (1 Oct–30 Sep) | Government, via the Finance Acts (Revenue rates) |
| What it funds | Renewable electricity support schemes | General taxation on fossil fuels |
| VAT on top | Yes, 9% | Yes, 9% |
The one subtlety worth knowing: electricity is not carbon-tax-free in an economic sense — fossil-fuel generators pay for their emissions and that cost is baked into wholesale prices, and therefore into your unit rate. It just is not a separate line on the electricity bill. The full story, including the current per-kWh rate on gas, is in our carbon tax guide.
Can I switch to a supplier that doesn't charge the PSO levy?
No such supplier exists. The PSO levy is a statutory charge: every licensed supplier in Ireland must collect exactly the amount the CRU sets, from every domestic account. It is identical at Electric Ireland and at the smallest independent, on prepay and on bill pay, on the dearest standard rate and the deepest new-customer discount. Any comparison that claims a supplier "includes" or "waives" the PSO is either confused or counting it inside a bundled total — the levy itself never varies.
What switching does move is everything around the levy. At CRU typical usage, the gap between a sharp year-1 deal and a drifting standard rate is measured in hundreds of euro — against a levy worth about €19.10 a year now and about €6.67 from October. So treat the PSO as background noise and put the effort where the money is: our best energy in Ireland ranking shows year-1 and year-2 costs for every supplier we track, cheapest electricity ranks the electricity-only plans, and the average electricity bill guide shows how all the lines stack into the total.
One disclosure while we are talking comparisons: matched.ie is not a CRU-accredited price-comparison site. We rank verified suppliers and explain the mechanics, but if you want a regulated comparator, the CRU publishes its accredited list on cru.ie.
Where to next?
- Electricity bill explained — every line on the bill, PSO included, in order.
- Carbon tax on gas — the other Government line, and why it never appears on electricity.
- Standing charges — the flat charge that actually moves your bill.
- Best energy in Ireland — the ranking, year-1 and year-2 cost side by side.
- How to switch — 2–4 weeks, one form, supply never blinks.
