Warning to South Africans with solar panels

Eskom’s proposed retail tariff plan will have a big impact on South African households and businesses with solar rooftop PV.

Last week, Eskom announced that the National Energy Regulator of South Africa (Nersa) has published its proposed plan for public consultation.

“The primary goal is to ensure that customers only pay for the costs they incur,” Eskom said in a statement.

The power utility explained that the proposed tariff changes aim to support an evolving electricity supply industry.

“It ensures that electricity tariffs reflect costs for generation, transmission, and distribution services,” it said.

Eskom’s proposed retail tariff plan includes major structural changes to the retail electricity tariffs.

The first is the removal of inclining block tariffs, where residential households pay more per unit as they buy more electricity.

Eskom proposes to remove the block tariffs so that low-usage households pay the same price no matter how often electricity is bought in a single month.

Another major change affects households and businesses with solar rooftop PV connected to the grid and that use Eskom-supplied energy as a backup.

Eskom said these users, who use the power utility as a ‘backup battery’, will still be required to pay to use the network.

Simply put, Eskom’s proposed retail tariff plan will see users with solar rooftop PV pay significantly more than they currently do.

Eskom said unbundled tariffs will enable it to recover NERSA-approved costs and returns by aligning prices and tariff rates with the actual costs incurred.

“Insufficiently unbundled tariffs pose revenue risks for the licensee and unfairly increase tariffs for all customers,” Eskom said.

“Properly unbundling and structuring tariffs will ensure fair cost recovery, avoid unfair cross-subsidies, and support the responsible integration of alternative energy sources.”

“The new tariff application is a crucial step towards fully unbundled tariffs, which will have separate charges for electricity capacity usage and network services.”

It said this approach will accurately reflect the costs of electricity services and enhance customer transparency.

“The application does not include customers who have completely disconnected from Eskom’s grid and have no Eskom connection or meter,” it said.

Eskom said their proposed retail tariff plan will have many benefits.

• Customers who can export any own-generated excess energy onto the grid can reduce their electricity bill through energy credits.

• Tariffs for municipal distributors purchasing in bulk are likely to benefit on average from lower costs due to lower subsidy contributions and reduced fixed charges.

• Large industry, mining, commercial and rural customers will see an overall reduction in fixed charges and winter energy time-of-use prices.

“Members of the public are urged to take part in the public hearings where Eskom will openly respond to all questions on the proposed tariff structure,” it said.

Sharp criticism

Kevin Mileham, parliamentary member and DA spokesperson on energy and electricity slated Eskom’s proposed retail tariff plan.

He said the DA strongly condemns Eskom’s ongoing attempts to increase fixed network charges.

Mileham said increasing these charges will severely impact South African consumers and businesses.

He warned against such unfair tariff structures, saying it is a desperate attempt by Eskom to pass on the costs of its own corruption and mismanagement to the public.

“Eskom is punishing South Africans who have taken proactive steps, such as investing in solar power, to reduce their dependence on its unreliable supply,” he said.

He said the power utility is pursuing to support its dwindling earnings as consumers look for alternatives.

Mileham added that the power utility is chasing its customers away through an unstable electricity supply and sharply rising rates.

The DA argues that the adoption of renewable energy is part of a sustainable solution to South Africa’s energy crisis.

“Eskom should be encouraging, not penalising, efforts to shift towards cleaner, renewable energy,” Mileham said.

“It is unjust that the less one consumes, the more they are charged, especially when these costs are labelled as fixed.”

“South Africa needs a diversified energy mix that is stable, affordable, and future-focused. Eskom’s proposal falls far short of these objectives.”

Mileham urged Eskom and Nersa to abandon policies that undermine consumer efforts to use alternative energy.

“Nersa should stop forcing South Africans to pay the price for Eskom’s inefficiencies. They should not be penalised for seeking a cleaner, more reliable energy future.”