THE National Energy Regulator of South Africa (NERSA) has once again approved electricity tariff increases for Eskom which are well above inflation.
NERSA announced a 12.7% tariff increase which will be introduced for the 2025/26 financial year, followed by 5.36% in 2026 and 6.19% in 2027. This has widened the gap between Eskom’s electricity tariffs and inflation further – placing immense pressure on South African households.
Eskom had asked for a 36% increase in electricity charges for its direct customers and a 44% increase for wholesale tariffs for municipalities. While the approved increases are significantly lower than what Eskom had applied for, the effective 24% hike over the next 3 years will deepen the financial strain on families already struggling with escalating costs.
“What’s important to bear in mind is that Eskom customers are already paying almost 34% more for electricity than they were 2 years ago.
These significant increases erode the positive effects of cooling inflation and recent interest rate cuts, as well as any near-term economic improvements, as they could once again drive-up consumer inflation,” says Marc du Plessis, Executive Head of Standard Bank’s LookSee home efficiency platform.
“However, this is not just about the immediate impact on electricity bills – it’s also about the long-term strain these ongoing tariff hikes place on household budgets.”
NERSA’s public hearings on Eskom’s tariff proposals drew what the regulator called “an overwhelming level of interest from the public”, underscoring the growing concerns of South African families about the unaffordability of these double-digit increases.
“The public response to these hearings reflected the widespread frustration over the unaffordability of electricity, which has consistently outpaced inflation by significant margins in recent years,” notes Du Plessis.
“This upward trend in electricity bills highlights the urgent need for more sustainable and affordable energy solutions to alleviate the financial burden on households,” says Du Plessis.
Solar: A Long-Term Solution to Rising Electricity Costs
The mounting costs of grid electricity have made solar power increasingly attractive to households. Solar systems not only reduce monthly electricity bills but also provide long-term protection against tariff hikes. “Solar investment is more compelling than ever. Families must consider not only the immediate savings but also how these systems can shield them from future increases,” adds du Plessis.
Standard Bank is actively supporting this transition with its Solar Loan offering, launched under the government’s Energy Bounce Back Loan Guarantee Scheme. The Solar Loan offers competitive interest rates (starting at prime +1%) and flexible repayment terms of up to five years. However, this opportunity is time sensitive as Standard Bank’s offering will come to an end on 20 February 2025.
It’s important, however, that affordable solar offerings be developed so that more households can benefit from the savings that solar offers, says Du Plessis.
In this regard, LookSee has launched an alternative to traditional solar geysers which converts existing electric geysers to get power from normal solar PV panels. This cost-effective option eliminates the need for expensive plumbing work and can reduce household electricity bills by up to 40%.
“We have seen interest in solar offerings starting to climb again in the second half of 2024 and we believe this is as a result of concerns surrounding electricity prices. We expect this trend to continue as households look for sustainable ways to protect their budgets,” says du Plessis.
As South African households brace for the financial impacts of Eskom’s tariff increases, solar power offers a viable alternative to reduce dependency on grid electricity.
With Standard Bank’s Solar Loan set to end in early 2025, now is the time for households to act.
Image supplied (Marc du Plessis, Executive Head of Standard Bank’s LookSee Home Efficiency Platform).
