A new report from the Economic and Social Research Institute (ESRI) has sent a clear message to the Irish government: universal energy credits may be popular, but they are not the most effective way to help those shivering in their own homes. The study, released today, finds that in 2024, roughly 14% of Irish householdsāor one in sevenāwere unable to afford adequate heating or pay their utility bills in full.
While this figure is a marked improvement from the 25% recorded during the financial crisis over a decade ago, it masks a much larger problem. When researchers looked beyond simple self-reporting and analysed high energy costs relative to income, they found that over 30% of households are actually facing some form of energy affordability challenge.
Perhaps the most striking finding in the report is the calculation of the “energy poverty gap.” Researchers estimate that households currently trapped in fuel poverty would need an average of ā¬480 per year in additional income to escape their situation.
To help every affected household in Ireland, the total cost would be approximately ā¬370 million. Crucially, the ESRI points out that the government spent between ā¬550 million and ā¬575 million on universal electricity credits in 2024. By switching from universal credits (which go to everyone, regardless of income) to targeted supports, the state could provide more meaningful relief to those in need while saving the taxpayer nearly 40% in costs.
The profile of those struggling to keep the lights on and the radiators warm is consistent. Energy poverty is concentrated among:
- Low-income households and those relying on social welfare.
- Renters, who often live in less energy-efficient properties.
- Single-adult families and female-headed households.
- Rural residents, who often face higher heating costs and lack access to the gas grid.
Dr. AndrĆ©s EstĆ©vez, a lead researcher at the ESRI, argues that the current system needs to be more “multidimensional.” Currently, the government primarily uses the “Fuel Allowance” to help the vulnerable, but many people just above the income threshold fall through the cracksāa phenomenon known as the “cliff-edge” effect.
“Targeted interventions can deliver more adequate support to those most in need at a fraction of the cost of universal measures,” Dr. EstĆ©vez stated today. The report recommends that the government track three key indicators: inability to afford warmth, high costs relative to income, and unusually low energy expenditure (which often indicates a family is “self-rationing” and sitting in the cold to save money).
The report comes at a time of renewed pressure on the cabinet. Minister for Climate and Energy Eamon Ryan has previously defended universal credits as a “fast and efficient” way to deliver aid during price spikes caused by international conflicts. However, with the ESRI’s data now showing a clear path toward a more efficient, targeted system, the upcoming Budget 2027 is expected to see a significant shift in how energy supports are distributed.
As Ireland moves toward its climate goals, the ESRI warns that the transition to green energy must be “just.” Without better targeting, the costs of retrofitting and carbon taxes could disproportionately burden the very families currently struggling to afford a warm home.
