Pain coming for South African households next week

South African households need to prepare themselves for higher electricity prices starting on 1 April, as Eskom’s new tariff increases and tariff structures kick into effect.

This will see Eskom direct customers pay an average of 12.7% more for electricity in the new month, along with additional fixed services charges slapped onto bills.

Municipal customers will have their pain delayed by a couple of months, with new municipal pricing kicking in from 1 July.

Energy expert and managing director of EE Business Intelligence Chris Yelland has warned that some residential customers will experience a much higher increase than the 12.74% average electricity price increase.

However, some customers will experience reductions in their monthly electricity spend.

This is because of the new tariff structure, which adjusts the previous cross-subsidies between large and small customers, rural and urban customers and rich and poor customers.

The restructuring slaps new fixed charges onto bills and implements new time-of-use charges for peak hours in summer and winter and gets rid of the subsidised incline block tariff. All on top of the price hikes.

Eskom has three main suites of residential tariffs, namely Homelight, Homepower and Homeflex.

Homelight (Homelight 20A and Homelight 60A) is intended for low-income residential customer and Homepower (1 through 4) targets middle- to high-income residential customers.

Homeflex (1 through 4) represents the flexible time-of-use package, also targeting middle- and high-income households.

Yelland conducted an in-depth analysis of the changes and found that the restructured pricing and tariffs negatively impact lower-income households more than higher-income households.

This is generally because higher-end users have more options available to them to avoid charges—such as Homeflex users who can adapt their appliance use to shift the load and take advantage of different off-peak periods.

Such measures are typically not available to poorer households, who are stuck with more direct increases with little room to manoeuvre.

The expert outlined the general increases customers can expect:

Homelight

Homelight customers with low consumption of 350 kWh and less per month face increases of 13.57%, which is above the average Eskom increase of 12.74%.

Customers on the Homelight 20A tariff using more than 350 kWh per month experience progressively
lower increases than the average Eskom increase of 12.74%.

This is result of Eskom eliminating the highly subsidised component of the inclined block tariff for monthly consumption of less than 350 kWh per month in favour of a higher flat-rate energy tariff.

Indigent customers on the Homelight 20A are supposed to receive 50 kWh of free basic electricity per month, which should offset the 13.57% electricity price hike—however, Yelland noted that more than 80% of indigent households in South Africa are not on the relevant municipal indigent registers.

“Therefore the significant majority of indigent households do not, in fact, receive any free basic electricity from Eskom or their local municipality,” he said.

The same trend surfaces with the Homelight 60A tariff, where lower-end users face tariff hikes of 18.26%, instead of 12.74%.

Homepower

For the Homepower (Homepower 4) tariff, customers with a consumption of 750 kWh and less per month face massive cost increases significantly higher than the average Eskom increase of 12.74%, Yelland noted.

Customers on the Homepower 4 tariff using 800 kWh and more per month will experience significantly lower cost increases than the average Eskom increase of 12.74%, while customers using 1100 kWh and more per month will experience significant cost reductions.

This is also a result of eliminating the inclined block tariff of Homepower 4 in favour of a flat-rate energy component, with a 31.9% reduction in the variable energy rate for consumption above 600 kWh, and a corresponding massive increase of 88% in the fixed monthly component of the Homepower 4 tariff from R192.90 per month to R362.70 per month—which impacts low consumption customers the hardest.

Homeflex

Yelland noted that it is not possible to determine the cost increase for various monthly energy consumptions for Homeflex, based on the new tariff rates for 2025/26.

This is because the actual cost increase/decrease will depend not only on the monthly energy consumption of the customer, but also on the customer’s load profile and response to time-of-use pricing signals.

However, there are massive price increases in the Homeflex 4 summer and winter peak, standard and off-peak energy rates, as well as in the fixed monthly components of the tariff, which will come into effect on 1 April 2025, so customers will be hit hard.

Yelland added that there is a significant 60.8% reduction in ‘other variable charges’ (i.e. auxiliary, legacy and network charges), but these form a relatively low portion of the total variable charges.