South Africans face yet another staggering blow as Eskom proposes a 36.15% electricity tariff increase, threatening to push household energy costs to unprecedented levels. If approved by the National Energy Regulator of South Africa (Nersa), the increase would result in households paying an additional R2,960 per month for electricity by 2025, compared to rates in 2010—well above inflation.
The proposed increase is part of Eskom’s effort to implement “cost-reflective pricing,” which the utility claims is necessary to cover the true cost of generating and distributing power. Historically, Nersa has rejected Eskom’s pricing adjustments, contributing to the utility’s financial woes and delaying much-needed reforms. However, questions arise as to how accurately these costs have been calculated and whether this is another overreach by Eskom and the energy regulator.
While Eskom insists this approach will prevent sharp, sudden hikes in the future, consumers are already reeling from a 350% increase in electricity prices since 2010—far outpacing the 67.8% rise in inflation over the same period. This steep escalation in costs comes at a time when South Africa’s economy is struggling, with households facing mounting pressures from stagnant wages and rising living expenses.
Self-Reliance: A Costly Alternative
In response to the electricity crisis, many South Africans are turning to alternative energy sources like hybrid solar solutions. While these systems offer the promise of more sustainable, long-term savings, the upfront costs can be prohibitive for many. The initial investment required for solar panel installations, combined with monthly service fees for grid connectivity, makes it difficult for lower-income households to embrace these alternatives.
Even as hybrid solar systems gain traction, offering households a way to reduce their reliance on Eskom’s erratic pricing and grid failures, the reality remains that solar energy is not a viable solution for all. For many, the cost of solar installations is simply out of reach, and the dream of energy independence remains distant.
Is Solar the Answer?
Eskom’s aggressive pricing strategy is pushing more consumers toward alternative energy sources. Solar power has seen rapid growth, with private sector contributions to the national grid doubling since 2008. Yet, while hybrid systems are more affordable than going fully off-grid, they are still not the silver bullet to South Africa’s energy crisis.
In an economy already battered by rising costs, the pressure of another significant electricity price hike could have disastrous effects. Households unable to switch to solar power will continue to bear the brunt of Eskom’s failing infrastructure and exorbitant debt. As those who can afford to switch off the grid do so, Eskom’s shrinking customer base could lead to higher rates of non-payment from those left behind—further deepening the utility’s financial troubles.
A Call to Action
The public has until 1 November 2024 to comment on Eskom’s revenue application for the next three financial years. Nersa will consider these comments before making a final decision on whether to approve Eskom’s proposed tariff hike. Now is the time for South Africans to raise their voices and demand more equitable solutions to the nation’s energy crisis.
If you are outraged by Eskom’s proposed increase and the financial burden it will place on already-struggling households, make your voice heard. Sign the petition here: Dear South Africa – Eskom MYPD6.
As the government continues to prioritize short-term fixes over sustainable reforms, the economic toll of energy mismanagement grows. The proposed price hike far exceeds inflation, making it clear that South Africa’s energy crisis is not just about supply and demand—it’s about the unchecked greed of those in power.
Conclusion
South Africans are at a crossroads. With energy costs soaring and the promise of relief through alternative sources limited by affordability, it’s clear that deeper, systemic reforms are needed. As Eskom pushes for cost-reflective pricing and massive increases, the public must act now to protect their financial futures and demand accountability from both the utility and the government.
