30-Second Overview
The Public Service Obligation (PSO) Levy is a government-regulated charge on electricity bills that supports renewable electricity generation, including wind and solar power. For businesses, the levy is calculated based on their meter's Maximum Import Capacity (MIC), with higher MIC settings resulting in higher charges for meters of 30 kVA or above. The levy is set annually by the Commission for Regulation of Utilities (CRU), with new rates taking effect on 1 October each year. The key points for businesses are:
- Small businesses (MIC below 30 kVA) pay a fixed monthly levy.
- Medium and large businesses (MIC of 30 kVA or above) pay a monthly levy based on their Maximum Import Capacity (MIC).
- The levy changes annually, largely reflecting movements in wholesale electricity prices and the cost of supporting renewable generation.
- Electricity suppliers cannot negotiate the levy, but businesses can reduce their overall electricity costs by reviewing their MIC and comparing electricity prices.
⚡ Are you paying more than necessary on your electricity bills? The PSO Levy is regulated, but other charges and electricity rates can be reviewed. Utilityfair's Energy Advisors can analyse your electricity bill, check your MIC and compare prices from all suppliers to identify potential savings. It's completely free. Choose an option below to get started. 👇
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What Is the Electricity PSO Levy?
The Public Service Obligation (PSO) Levy is a government-regulated charge collected through electricity bills to support the generation of renewable electricity.
The levy helps fund renewable energy projects, including wind and solar farms, through government support schemes such as the Renewable Energy Feed-in Tariff (REFIT), the Renewable Electricity Support Scheme (RESS) and the Small-Scale Renewable Electricity Support Scheme (SRESS).
The Commission for Regulation of Utilities (CRU) calculates and approves the levy annually, with new rates normally taking effect on 1 October each year. Electricity suppliers collect the levy through customer bills and pass the funds through the regulated system. Suppliers do not profit from the charge.
How Does the Electricity PSO Levy Work?
The Electricity PSO Levy operates on a counter-cyclical basis. This means it generally decreases when wholesale electricity prices rise and increases when wholesale prices fall.
Why Does the PSO Levy Fall When Electricity Prices Rise?
- When wholesale electricity prices are high: Renewable generators receive more revenue from selling electricity into the market. This reduces the subsidy required and lowers the PSO Levy.
- When wholesale electricity prices are low: Renewable generators receive less revenue from the market. More subsidy funding is required, increasing the PSO Levy.
Under the Renewable Electricity Support Scheme (RESS), generators must repay the difference when wholesale market revenues exceed their agreed support price. These repayments reduce the overall PSO funding requirement and can result in customers receiving a PSO credit rather than paying a levy.
How Is the PSO Levy Calculated Each Year?
The CRU determines the total funding required by considering three main factors:
- Forecast wholesale electricity prices: The expected market revenue earned by supported renewable generators.
- Renewable energy support costs: The funding required under government renewable electricity support schemes.
- R-factor adjustments: Corrections for differences between forecast and actual support costs from previous periods.
The CRU uses these calculations to determine the total PSO funding requirement, which is then allocated across electricity customer categories and recovered through electricity bills.
How Is the Electricity PSO Levy Calculated for Businesses?
The amount a business pays towards the Electricity PSO Levy depends on its meter's Maximum Import Capacity (MIC), measured in kilovolt-amperes (kVA). The Commission for Regulation of Utilities (CRU) divides commercial electricity customers into two categories:
- Small commercial customers (MIC below 30 kVA): Pay a fixed monthly PSO Levy, regardless of their electricity consumption or MIC setting within this category.
- Medium and large commercial customers (MIC of 30 kVA or above): Pay a monthly PSO Levy calculated by multiplying their MIC in kVA by the applicable PSO rate per kVA.
The PSO Levy is separate from electricity unit rates and standing charges. It does not increase or decrease based on how many kilowatt-hours (kWh) a business consumes.
Example: Calculating the PSO Levy for a Business
The examples below show how the Electricity PSO Levy is calculated for small and larger commercial customers using the 2026/2027 rates, excluding VAT.
Small Business
MIC below 30 kVA
Annual PSO Levy
€23.16
€1.93 × 12 months
Larger Business
MIC of 30 kVA or above
Annual PSO Levy
€576.00
200 kVA × €0.24 × 12 months
Can Reducing Your Electricity MIC Lower the PSO Levy?
For businesses with an MIC of 30 kVA or above, reducing an unnecessarily high MIC will lower their PSO Levy and can also reduce network capacity charges. However, setting MIC too low can result in excess capacity charges if electricity demand exceeds the contracted capacity. Any adjustment should be based on the business's actual maximum electricity demand.
For businesses with an MIC below 30 kVA, reducing MIC within this category does not reduce the fixed monthly PSO Levy. For more information on reviewing and adjusting your MIC, read our guide to Maximum Import Capacity (MIC).
Electricity PSO Levy Rates Since 2021
The Electricity PSO Levy has changed significantly since 2021, reflecting movements in wholesale electricity prices and the cost of supporting renewable electricity generation. During 2022/2023, the levy became negative, resulting in credits on electricity bills. Charges were set to zero for 2023/2024 before returning in October 2024. The table below compares historical PSO Levy rates for domestic, small commercial and medium/large commercial electricity customers.
| Regulatory Year | Domestic (€/month) |
Small Commercial (€/month) |
Medium/Large Commercial (€/kVA/month) |
|---|---|---|---|
| 2026/2027 | €0.51 | €1.93 | €0.24 |
| 2025/2026 | €1.46 | €5.65 | €0.70 |
| 2024/2025 | €3.23 | €12.91 | €1.57 |
| 2023/2024 | €0.00 | €0.00 | €0.00 |
| 2022/2023 | - €7.43 | - €25.96 | - €3.15 |
| 2021/2022 | €4.30 | €13.63 | €1.63 |
Small commercial: MIC below 30 kVA. Medium/large commercial: MIC of 30 kVA or above. All rates exclude VAT.
How Utilityfair Can Help Reduce Your Business Electricity Bills
The Electricity PSO Levy is a regulated charge that suppliers cannot discount. However, businesses can still reduce their overall electricity costs by reviewing their MIC, electricity rates and other charges. Utilityfair's Senior Energy Advisors can help by:
- Reviewing Maximum Import Capacity (MIC): Analysing electricity demand to identify unnecessarily high MIC settings that increase PSO Levy and network capacity charges.
- Comparing electricity prices: Comparing rates and contract options from all Irish electricity suppliers to get the most competitive available prices.
- Checking electricity bills: Reviewing unit rates, standing charges and regulated costs to identify potential savings.
- Managing contract renewals: Monitoring contract expiry dates and reviewing available offers before existing agreements end.
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Get a free review of your electricity bills, including your MIC, PSO Levy and other charges, plus a side-by-side comparison of electricity prices from all Irish suppliers. Complete our enquiry form using the buttons below, or call 01 547 0999 to speak directly with a Utilityfair Energy Advisor.
Frequently Asked Questions (FAQs)
Yes. The Electricity PSO Levy is a government-regulated charge that applies to electricity customers in Ireland. Electricity suppliers are required to collect the levy at the rates approved by the Commission for Regulation of Utilities (CRU).
Businesses cannot opt out of paying the levy or negotiate a lower PSO rate with their supplier.
Yes. Businesses with a Maximum Import Capacity (MIC) of 30 kVA or above can reduce their PSO Levy by lowering an unnecessarily high MIC.
However, reducing MIC below actual electricity demand can result in excess capacity charges. Businesses with an MIC below 30 kVA pay a fixed monthly PSO Levy, so reducing their MIC within this category will not lower the charge.
Yes. The PSO Levy is regulated by the CRU, so the applicable rate is the same regardless of which electricity supplier a business uses.
Switching suppliers does not change the PSO Levy, but comparing electricity prices can reduce other costs on the bill.
Yes. Businesses purchasing 100% renewable electricity still pay the PSO Levy. The charge supports renewable electricity generation nationally and is not determined by the type of electricity contract a business holds.
Yes. VAT applies to the Electricity PSO Levy at the applicable electricity VAT rate. The rates and worked examples in this article exclude VAT.
The PSO Levy became negative during 2022/2023 because exceptionally high wholesale electricity prices reduced the funding required to support renewable electricity generators.
The resulting negative levy provided credits to electricity customers rather than adding charges to their bills.
