South Africans using electricity are about to get a huge shock

Energy regulator Nersa’s approval of a 12.7% electricity price hike in 2025, along with changes to how Eskom structures its pricing, will see electricity users take some serious pain next month.

This is according to a breakdown from independent energy analyst Pieter Jordaan, who mapped out how the latest changes will impact Eskom customers when the new pricing kicks in on 1 April 2025.

Two key changes from Eskom—and a possible third if the National Treasury passes a new VAT rate later in March—are about to hit South African electricity users.

The first big change is the approved Eskom price hikes for 2025, which Nersa allowed at 12.7% for 2025/26.

The second big change is Nersa’s approval of Eskom’s Retail Tariff Plan (RTP), which restructures the power utility’s tariffs and introduces new fixed network charges.

According to Jordaan, Eskom’s solution to the problem of more customers shifting away from typical electricity consumption to alternative sources is the introduction of new fixed charges.

As these users—often more affluent—turn to alternative power, their consumption decreases, adding costs to those customers who remain.

While these alternative energy users use less Eskom energy, they remain connected to the grid, and the utility has to account for this and ensure that energy is available when they need it.

This was also the cause for the removal of the incline block tariff (IBT) under the new structure.

The IBT was designed to benefit low-income, low-consumption energy users but instead ended up giving “uneconomic incentives for customers installing embedded generation,” Eskom said.

Eskom has argued that due to the migration to solar power by wealthy customers, it was losing the additional premium income needed to subsidise poorer customers.

By ‘front-loading’ its tariffs, it hopes to recoup this loss, Jordaan said. However, this strategy will deliver some bill shock to lower-consumption households.

Now all Eskom customers will be hit with fixed non-generation costs relating to transmission, distribution and consumer account administration, which Jordaan says has been “escalated substantially”.

Eskom’s original application would have seen these fixed charges more than double—even tripling in some cases.

This would have resulted in 2025 tariff increases between 14% and 68% from April 2025, depending on the specific Eskom plan and the amount of power used.

However, Nersa’s final approval of the new structure will see the costs phased in over three years, with 2025 only seeing 20% of Eskom’s applied rate.

30% will be added in 2026/27 and another 30% in 2027/28.

This reduces the effective tariff increase in 2025, but it still comes in much higher than the 12.7% granted by Nersa—and the prices will continue to escalate, with a likely inflation-based increase also attached.

Jordaan calculated the indicative tariff hikes as follows:

How much you can expect to pay

The tables below outline the estimated costs for Eskom customers based on the changes for 2025, including the 20% limitation on fixed fees approved by Nersa, the approved 12.7% tariff hike, and 15% VAT.

Crucially, if the National Treasury applies a higher VAT rate after it tables the 2025 Budget later in March, the values and bill shock will be even higher.

The introduction of fixed fees has a much greater impact on low users than high users, who may see slight reductions based on the new structure.

Jordaan noted that the HomePower 4 package, also known as HomePower Standard, arguably best reflects the average household.

He added that his current research points to declining average electricity usage in South Africa, with the average households using between 300kWh and 600kWh.

This is substantially lower than the 650kWh to 4000kWh Eskom used in its restructure application.

Low users (300kWh/m)

Medium users (600kWh/m)

High users (900kWh/m)