South Africans are kissing Eskom goodbye – and it is not because of load-shedding

Despite Eskom’s improved stability and performance, South African households and businesses continue to opt for alternative energy sources, citing the utility’s high prices and significant financial savings.

Since the height of load-shedding, the costs associated with switching to an alternative energy source like solar have decreased significantly, making these alternatives more affordable than grid electricity in some cases.

A survey conducted by fund manager Jaltech, based on responses from over 2,000 South African solar users and potential adopters, found that rising electricity tariffs and significant financial savings are the primary drivers of solar adoption.

This marks a shift from just a few years ago, when Eskom’s frequent implementation of load-shedding drove many users toward alternatives.

“South Africa’s solar market has matured rapidly,” Jaltech partner Jonty Sacks said. “What began as a response to unreliable electricity supply has become a core financial decision.” 

“Solar now represents cost stability, resilience and long-term savings for South Africans from day one.”

Jaltech’s survey, the country’s largest solar user survey to date, showed that 82% of homeowners and 79% of businesses surveyed who do not have solar plan to install solar within the next 12 months.

In addition, it revealed that 93% of homeowners and 79% of businesses with solar systems are already realising measurable savings on their electricity bills.

In fact, the survey found that, for 54% of business users surveyed, solar now offsets the majority of their energy consumption.

However, Jaltech noted that high upfront costs remain the primary barrier for non-adopters. Costs to switch to alternative energy sources can range anywhere between R55,000 all the way up to R250,000.

These high upfront costs, combined with increasing demand to make the switch, have enabled billions of dollars in alternative energy financing over the past few years.

For example, Standard Bank has set ambitious targets to mobilise over R450 billion in funding by 2028.

The graph below shows the far-above inflation increases in electricity tariffs since 2003.

Eskom’s vicious cycle

Many energy experts have warned that Eskom’s persistent above-inflation electricity tariff hikes would result in an increasing number of customers dumping the utility for cheaper alternatives.

The price of electricity in South Africa has skyrocketed in the past two decades. Since 2009, electricity prices have jumped by more than 600%, significantly more than CPI inflation over the same period. 

This has made Eskom’s electricity prices unaffordable or unjustifiably expensive for many South Africans, which has resulted in lower sales as households and businesses reduce their reliance on the utility.

As its sales decline while the cost of producing electricity increases, Eskom is forced to raise prices even higher to cover its costs and make up for the revenue shortfall.

This creates a vicious cycle where prices continue to rise and more and more South Africans turn to alternatives.

“When you sell less of your product but want to make the same amount of money to cover your costs, you have to put the price up. But then, demand goes down again, so you get this vicious cycle,” energy analyst Chris Yelland previously explained.

“We are not out of this vicious cycle. We are in the middle of it, with Eskom continuing to ask for above-inflation increases each year. So yes, they are in a kind of death spiral.”

Major local companies have made their intentions to become less reliant on Eskom clear, with the latest example being South Africa’s biggest landlord, Growthpoint.

The real estate investment trust recently acquired a 30% stake in the Boston Hydroelectric Plant, which will supply energy to 23 of the real estate giant’s properties.

This forms part of the group’s larger strategy of increasing its reliance on various forms of renewable energy, including rooftop solar and a new e-co₂ wheeled renewable energy initiative.

Even some government entities have expressed a desire to reduce their reliance on the national grid.

On 8 August 2025, the City of eThekwini became the first municipality in South Africa to receive approval from the Electricity Minister to procure new electricity generation capacity directly from Independent Power Producers.

This marked a major step forward in the municipality’s ambitious strategy to reduce its reliance on the national grid by 40% by 2030.