More than one in ten households cannot afford a warm home or their energy bills

A new report published by the Economic and Social Research Institute (ESRI) finds that in 2024, 14% of Irish households self-reported being unable to afford adequate warmth or pay their utility bills in full. This figure is well below the 25% level recorded during the financial crisis. Meanwhile, data from Ireland’s official indicator shows that in 2015, just over one in ten households spent more than 10% of their disposable income on energy services. This report was funded by the Department of Climate, Energy and the Environment.

Households experience energy poverty when they are unable to afford essential energy services—such as adequately heating their homes, lighting, cooking, or powering appliances—needed to sustain basic health and a dignified standard of living. While shaped by broader macroeconomic and geopolitical pressures, energy poverty is driven by a combination of low disposable income, high energy costs, and poor housing quality. It is deeply rooted in structural socio-economic challenges, including income inequality, unemployment, and multiple, overlapping forms of deprivation.

Energy poverty metrics, when used on their own, underestimate the scale of the problem. This report examines ten energy poverty indicators alongside a range of complementary socio-economic measures, assessing their respective strengths and limitations. It argues that because energy poverty is experienced in diverse ways, a monitoring system that tracks multiple indicators is needed to inform the design of effective policies to support those most in need.

Key findings:

•    Single measures risk missing those most in need: Relying on one indicator underestimates the scale of the problem and can overlook vulnerable groups. A multidimensional monitoring system would better support both short-term responses and long-term policy design.

•    Energy poverty is broader than headline figures suggest: While individual indicators point to relatively modest levels, over 30% of households experience some form of energy affordability challenge when multiple measures are considered.

•    Timely data matters for policy: Self-reported indicators provide more up-to-date signals of energy hardship, making them particularly useful for responding to economic shocks.

•    A new monitoring approach is proposed: The report recommends tracking three key indicators to provide a more complete and accurate picture of energy poverty: inability to afford adequate warmth, high energy costs relative to income, and unusually low energy expenditure.

•    Clear vulnerability profile: The analysed metrics show that energy poverty is concentrated among low-income households, renters, households with unemployed members, female-headed households, rural households, and single-adult families.

•    Strong links to wider social vulnerability: Households experiencing energy poverty are more likely to rely on welfare supports, particularly housing assistance, child-related payments, and fuel allowances, reflecting overlapping socio-economic challenges.

•    First estimate of the ‘energy poverty gap’: The report finds that households in energy poverty would need, on average, about €480 per year of additional income to exit energy poverty, corresponding to an indicative aggregate cost of around €370 million.

•    Targeted supports are more cost-effective: This estimated cost is significantly lower than the €550–575 million spent on universal electricity credits in 2024, suggesting that well-targeted measures could deliver similar support at roughly 40% lower cost.

Dr Andrés Estévez, Postdoctoral Research Fellow at the ESRI, said: “Tackling energy poverty requires a monitoring system that reflects the multiple ways it can be experienced. Targeted interventions can deliver more adequate support to those most in need at a fraction of the cost of universal measures.”

Dr Miguel Tovar Reaños, Senior Research Officer at the ESRI, said: “To enhance the protection for households experiencing energy poverty, closer coordination across social protection, housing, and energy policy is needed.”