Irish households are facing some of the highest electricity prices in Europe. Despite government actions like temporary VAT reductions, the real issues that drive up these costs remain unresolved.
In this blog, we will explore what is the cost of supplying Irish electricity out of Europe, why electricity costs so much in Ireland, and what needs to change to bring prices more in line with other European countries.
Are Energy Costs in Ireland a Growing Concern?
The Irish Solar Energy Association (ISEA) has criticised Ireland’s electricity prices, saying they are “outrageously out of line” with the rest of Europe. According to the ISEA, government actions like VAT cuts don’t deal with the root causes of these high costs.
ISEA, which supports solar energy, points to network charges as one of the main reasons behind rising electricity bills. These charges are often ignored in public discussions, and this is making things worse for consumers.
What Are Network Charges?
Network charges are the costs of getting electricity from power stations to homes. Conall Bolger, CEO of ISEA, explains: “These charges are completely in Ireland’s control. While wholesale electricity prices have gone up, VAT and the PSO levy are not the only factors pushing prices up.”
Although Ireland has some of the highest electricity prices in Europe, not much has been done to reduce these local costs. Bolger argues that too much attention is given to VAT and the PSO levy, which he believes distracts from the real issue.
He says, “Normally, for every €1 a household pays for VAT and the PSO levy, nearly €2 goes towards network charges—the cost of getting electricity to homes.”
The Commission for the Regulation of Utilities (CRU), a state body, sets these charges. The ISEA believes these charges should be reviewed, as they are much higher in Ireland than in other European countries.
What Needs to Change?
For electricity prices in Ireland to be more in line with Europe, the high network charges need to be addressed.
The government and other responsible bodies must look at solutions beyond temporary measures, like VAT cuts. It’s only by tackling these high charges and other domestic factors that Ireland can lower its electricity prices.
Why is Renewable Energy in Ireland So Expensive?
Ireland is paying much more for solar energy compared to other European countries. Conall Bolger points out that Ireland pays €73 per unit of solar power, while Spain only pays €32.
“Irish solar operators face unreasonable costs, with network charges reaching €26 per unit just to get energy onto the grid,” he said. “This is a major factor behind our high electricity prices.”
Renewable energy should help protect consumers from global energy price rises, but these high network charges prevent this from happening.
Bolger says these charges mean Irish people are paying far more for renewable energy than they should. He also says that while network charges may not seem like a big issue to the government, reviewing them could lower costs for consumers.
Bolger has also criticised temporary government measures like VAT reductions and electricity bill credits, saying they don’t tackle the real reasons behind high energy prices. “These actions won’t solve the real issues pushing up prices,” he said.
Rising Complaints About Energy Suppliers in Ireland
Recent figures show a worrying trend: nearly one-third of customer complaints against energy suppliers were upheld by the regulator last year.
The Commission for the Regulation of Utilities (CRU), which oversees energy companies and Irish Water, said 2021 was a “challenging year” because of rising global energy costs and the impacts of Covid-19.
The CRU dealt with 66,087 complaints in 2021—a 51% increase from the previous year. However, only 3% of these complaints were serious enough to need a full CRU investigation, although these cases rose by 10% compared to 2020.
Out of the 186 complex complaints closed by the CRU, 32% were resolved in favour of the customers.
What Are the Most Common Energy Supplier Complaints?
Billing issues were the most common reason for complaints, making up 50% of cases. Some of the most common problems included:
- Incorrect bills
- Catch-up bills (charges for previous underbilling)
- Unexpected charges
- Tariff disputes
Other complaints included issues with accounts, poor customer service, and metering problems. Additionally, 5% of complaints were about misleading marketing and problems when signing up.
Which Energy Suppliers Are Receiving the Most Complaints?
Complaints against the nine largest energy suppliers generally matched their market share, but there were two exceptions:
- Electric Ireland, which has a 43% market share, received only 19% of the complaints.
- Bord Gáis Energy, with a 21% market share, had 28% of the complaints—much higher than expected.
These numbers show that many Irish households are facing poor service, billing issues, and a lack of transparency from energy suppliers, making the high energy prices even more frustrating.
Reforming Ireland’s Energy Market: The Need for Change
With energy costs rising and complaints increasing, it’s clear that Ireland’s energy market needs urgent reform.
The government must focus on cutting network charges, improving billing transparency, and holding suppliers accountable for poor service. Strengthening regulation and making pricing fairer will help reduce the financial burden on consumers.
Time for Reform
Ireland’s electricity prices are still much higher than the European average, mainly because of high network charges, supplier issues, and billing problems.
So, what is the cost of supplying Irish electricity out of Europe? The answer lies in urgent regulatory changes, fairer pricing, and better control of network charges and energy suppliers. If these issues aren’t dealt with, Irish households will continue to pay far too much for their electricity.
A Call for Real Change in the Energy Sector
Consumers deserve fair prices, better service, and a more transparent energy system. The time for real change is now.
Take control of your energy future with SPV Energy. Reduce your reliance on expensive grids, adopt a sustainable energy solution, and help create a greener environment for all.
Frequently Asked Questions
- Why is electricity so expensive in Ireland?
Electricity prices in Ireland are higher than many other European countries due to high network charges, supplier issues, and billing problems. Network charges, which are set by the Commission for the Regulation of Utilities (CRU), are a significant factor, and these charges are much higher in Ireland than in most other European nations.
- What are network charges, and why do they make electricity more expensive?
Network charges are the costs involved in transporting electricity from power stations to homes. These charges are set by the CRU and are a significant portion of the overall cost of electricity in Ireland. While wholesale electricity prices have risen, network charges are the primary domestic factor pushing up prices.
- How do VAT and the PSO levy affect electricity prices in Ireland?
VAT and the PSO levy (Public Service Obligation) are additional costs added to electricity bills in Ireland. However, these are not the main drivers behind high electricity prices. While the government has implemented temporary VAT cuts, the real issue lies in high network charges, which should be addressed to lower overall electricity costs.
- Why is renewable energy, like solar power, so expensive in Ireland?
Ireland pays significantly more for renewable energy, such as solar power, compared to other countries. For example, Ireland pays €73 per unit of solar power, while Spain pays just €32. High network charges, which can reach €26 per unit for solar energy, are a major reason for this discrepancy, preventing renewable energy from offering cost savings to consumers.
- What needs to change to reduce electricity costs in Ireland?
To reduce electricity costs, Ireland needs to address the high network charges. The government and relevant authorities must focus on solutions beyond short-term measures, such as VAT cuts, and focus on tackling the underlying issues, like network charges and other domestic factors driving up energy prices.
- What can I do to lower my electricity bills in Ireland?
While immediate changes to the overall market might take time, one option for consumers is to consider alternative energy solutions, such as solar power. By reducing reliance on the national grid, households can potentially lower their electricity costs and contribute to a more sustainable energy future. Working with companies like SPV Energy can help in switching to renewable energy sources.