Save money by switching from Eskom to solar

While Eskom continues to hike electricity prices, the cost of solar energy decreases every year, making the switch to solar energy more appealing for households looking to cut costs.

This is the view of Versofy SOLAR co-founder and CEO Ross Mains-Sheard.

“South Africans are starting to feel the pinch of the 12.7% electricity tariff increase, which came into effect on 1 July, the latest in a raft of double-digit hikes in recent years,” he said, 

“In addition, City of Johannesburg residents who use prepaid meters now have to contend with a new R230 (including VAT) fee for network and service charges, irrespective of the number of units purchased.”

There has recently been a reprieve in load-shedding of over three months, the longest break since 2020. 

While this has given consumers some relief, Mains-Sheard explained that high electricity prices are likely to continue for some time, with many expecting tariffs to double over the next five years. 

“Localised outages, whether through ordinary faults or cable theft, are still a fairly common occurrence, and until Eskom’s long-term issues are fully resolved, there’s still a possibility that intermittent load-shedding could return,” he said.

“The decision to switch to solar energy is a sensible one to make, now so more than ever.”

Solar power can significantly improve the overall energy efficiency in residential homes and notably help reduce consumers’ electricity bills.  

Some people may be concerned about the overall affordability, given that solar panels will now incur a 10% import tax to prioritise supporting the local market demand. 

“However, until local companies can compete with international manufacturers on a cost, quantity and quality perspective, it may be some time before the 10% import tariff achieves the desired effect,” Mains-Sheard said.

Even with the implementation of this tax, switching to solar will still save consumers money.

An economic bulletin published by the South African Reserve Bank (SARB) revealed that Eskom’s electricity tariffs have increased by around 450% since 2008, exceeding inflation by a substantial margin. 

“The use of solar energy reduces the need for electricity from the grid, leading to significant savings on energy bills,” the bank said.   

“Solar power also boosts a home’s energy independence by enabling homeowners to produce their own electricity as a safeguard against inevitable future tariff hikes.”

One of the major challenges to the mass adoption of rooftop solar power is the initial capital costs required to buy a solar system outright. 

However, solar prices also decrease each year, making it more affordable for households.

“Generally speaking, the cost of solar PV panels decreases more than 10% each year. In contrast, Eskom increases prices at a similar rate,” Mains-Sheard added.

Rent-to-own and solar-as-a-service can also help households avoid the high upfront costs of solar equipment. 

“Instead of purchasing a solar system outright, consumers have the option to pay a fixed monthly amount for the solar energy system to operate on their property, where everything, from installation to support, is covered in a monthly fee,” he said.

This makes solar energy much more affordable and accessible for an increasing number of South Africans.

Solar rental packages effectively provide solar-as-a-service, where the customer is paying for the energy and benefit of having no power cuts rather than the system itself.

They are also substantially cheaper than when buying a system on a rent-to-own agreement, which combines the benefits of rental and ownership models.

“Beyond the immediate cost savings, we are quickly reaching the point where homes equipped with solar solutions are more economically viable than those without,” he said.

Solar power also adds to a property’s resale and rental value, Mains-Sheard said. 

“While the exact resale value of a property depends on a number of factors, enhancing a property’s sustainability credentials not only reduces running costs but also increases its market appeal over the long term,” he said.

“Ultimately, switching to solar energy is the most practical response to escalating electricity tariffs, and it has the added benefit of being an investment in a more sustainable, independent, and cost-effective future.”