South Africa’s energy crisis has shifted from one of poor availability to high prices, and those shielding themselves from rising tariffs are being punished under a new pricing regime.

These were among the key findings of the latest edition of Gosolr’s quarterly Light Paper, which argued that local electricity prices had become drastically more expensive since the first load-shedding in 2007.

The solar rental company highlighted that average electricity tariffs had increased by more than 1,100% in the last two decades, making South Africa the 7th most expensive for power among G20 countries.

“The irony is hard to ignore: just as load-shedding is declared ‘a thing of the past,’ electricity becomes financially out of reach for many,” Gosolr said.

“The numbers tell a brutal story. In 2014, a typical Eskom customer using around 800kWh per month paid approximately R1,055. By 2024, that same usage costs R3,388.”

Gosolr explained that South Africa’s electricity tariffs were designed around the principle that utilities must recover their costs and earn a regulated return.

That created a system where consumers were burdened with utilities’ inefficiencies. Eskom’s and certain municipalities’ recent aggressive increases in fixed capacity charges have distorted pricing signals.

“Historically, electricity was simple: pay per kWh. Use more, pay more,” Gosolr said. “This encouraged efficiency and innovation. Households could save money by reducing usage, switching to gas, or investing in solar.”

In its adjustments that kicked in on 1 April 2026, Eskom increased its fixed fees by nearly 29% to R543 per month for users on Homepower 4, its most common non-indigent residential tariff.

These changes were implemented in what was effectively the second phase of Eskom’s transition to its retail tariff plan (RTP).

The first phase of the change — implemented at the start of April 2025 — already increased the Homepower 4 fixed tariff by 88%.

The combined increase from about R193 to R543 means that these users are paying 181% more, just for having an electricity connection.

Low-energy consumers’ bills, therefore, increased disproportionately compared to those of high-energy users, even as the global trend was to encourage energy efficiency.

Solar power users feeling the heat

PV solar panels on a residential roof in a suburb of Johannesburg, South Africa.
Eskom has also forced grid-tied solar power users onto its time-of-use variable energy charges, which it increased between 4.5% to 5.3% in its latest adjustments.

“You now pay significantly just to be connected, regardless of how efficiently you consume. In other words, using less electricity no longer guarantees meaningful savings.”

Gosolr also lamented the differing and confusing electricity tariffs implemented by municipal distributors, especially Johannesburg’s City Power.

The utility forces registered solar power users onto a postpaid tariff plan with much higher fixed charges than on prepaid.

“The message locally is clear: invest in your own energy at your own risk — at a time where abroad developers are soon to be required to install solar panels and heat pumps in all new homes,” it said.

“This clear focus to ramp up solar reinforces a simple truth: clean power is considered an essential need – so why are we creating more barriers to adoption in South Africa?”

Gosolr also warned the International Trade Administration and Commission that South Africa’s plan to increase import tariffs on solar, wind, and battery components could harm local renewables’ growth.

Combined with the phasing out of the export tax subsidy in China, the changes could see the cost of imported batteries increase by about 25%, it said.

Biggest impact on middle class households

Gosolr warned that the real victims of the new tariff regime were middle-income users who did not qualify for subsidies but also lacked the finances to absorb repeated increases, or go off-grid entirely.

“As more consumers reduce usage or partially defect from the grid, the remaining users are forced to absorb a larger share of fixed costs,” it said.

“This creates a vicious cycle: higher prices drive lower consumption, which drives even higher prices.” Two of Eskom’s former CEOs have dubbed this outcome a “death spiral.”

“Small and medium-sized businesses face an even harsher reality,” Gosolr said. “Unlike large corporates, they cannot negotiate special tariffs or invest heavily in energy infrastructure.”

“Electricity costs hit their margins directly and immediately. When SMEs struggle, the broader economy feels it.”

In summary, Gosolr said the pricing system was sending the wrong signals, rewarding inefficiency and punishing progress.

“It is asking consumers to carry the cost of decades of mismanagement while offering little in return,” the company said. Gosolr said four measures could assure a sustainable energy future in South Africa:

Gosolr CEO Andrew Middleton said that although South Africa’s energy system was under pressure, it was not beyond repair.

“What we’re seeing now is the result of outdated pricing models trying to maintain the status quo and protect revenues, instead of embracing and enabling a rapidly changing energy landscape,” he said.

“If we can align incentives, embrace distributed generation, and build a pricing framework that is transparent, fair, and future-fit, we can unlock a more resilient and inclusive energy system for everyone.”

Source: https://mybroadband.co.za/news/energy/647355-eskom-has-declared-war-on-houses-with-solar-power-in-south-africans.html?utm_source=newsletter