The increase will take effect on April 1, 2023, with another 12.74% increase set to take place on April 1, 2024.

Despite the amendment, Eskom’s total revenue remains roughly the same, but they needed the increase due to factors such as depreciation, increased primary energy costs, and increased cost to procure electricity from independent power producers.

Nersa raised concerns over Eskom’s high usage of emergency generating capacity and declining energy availability factor at its coal power stations, which has a direct relation with the load shedding happening across the country. The decision was made after balancing all these factors.

This increase in electricity tariffs makes alternative forms of energy such as solar power even more attractive to consumers and businesses as a way to offset the rising costs of electricity from Eskom.

Solar power systems now have the dual benefit of reducing costs and also serving as a backup or uninterrupted power supply (UPS) during load shedding. They are normally configured to power the lights, plugs, WiFi, TV, fridge and alarm.

A 5kW solar PV system for an average sized household costs about R135 000 and has a lifespan of 20 to 30 years. See does solar save you money for more details. Financing for these systems is also becoming more readily available. One can choose to get a personal loan from a bank or have the system financed by the solar service provider directly.

The solar industry in South Africa has been growing by about 8% per annum (Rooftop Solar Market Growth Trends) and with this extra pressure on consumers it is likely that it will grow even faster in the near future. There are already an estimated 346 000 households with solar energy systems installed (1734.4 MW). However this is just 1.93% of the 17.95 million households in the country.

If the trajectory of other countries such as Australia is anything to go by, SA could be looking at a 230% increase in households with solar installed over the next 4 years. South Africa would however still be far behind Australia, which has solar on 32% of its households.

In any case, the outlook for solar in SA is very bright. The approval of an 18.65% electricity tariff increase is likely to have a significant impact on the economy and daily lives of people. With an additional 12.74% increase set to take place in the future, the cost of electricity is expected to be even more expensive for consumers and businesses.

The government, private sector and consumers should explore ways to increase the adoption of solar energy to help mitigate the impact of rising electricity prices. With a concerted effort, solar energy can play a vital role in providing a sustainable energy future for South Africa.

1. Avoid Loadshedding

As South Africans, we all know what it is like to deal with loadshedding, the rolling blackouts that our country experiences. By switching to solar with batteries, you are lowering the impact that loadshedding has on yourself, anyone else on your solar property and even the whole country as your demand on the grid will be reduced. Having this additional energy source means less frustration and less mental energy spent on planning your life around loadshedding. 

2. Save Money 

Eskom charges between R1.82 and R3.10 per unit (kWh) of electricity. The average cost per unit from a solar rooftop system in South Africa is now R1.36. This is calculated over the whole 20+ year lifetime of the system and does not include battery storage. A system with a battery will cost more but the price will be locked in while Eskom’s prices will continue to rise every year. Here’s a solar savings example. 

 3. Eliminate Financial Losses of Loadshedding 

Whether you work from home or at an office, having a steady supply of electricity allows you to stay productive all day long. This is also very important to businesses that have machinery that needs to run continuously. 

4. Reduce your Carbon Emissions 

Solar systems have a net positive impact on the environment because they don’t release carbon or any other greenhouse gasses when producing electricity. While the manufacturing process is not entirely clean the carbon footprint per kWh of electricity produced is still much better than the average. About 0.93kg of carbon emissions are avoided per kWh of electricity produced by solar panels in South Africa. 

5. Increase the Value of your Property 

Installing solar can increase the value of your home. The average increase in house prices after installing a solar system is 3% to 4%, however there are some factors to consider as each property is unique. This increase is normally about the same as the cost of installing the solar system. 

6. Simple and Flexible Installation 

Solar panel installation is simple, with the solar installer of your choice the solar panels can be installed anywhere on your property that gets enough sun. This is normally a north facing roof without any tall buildings or trees nearby. Solar systems are also quite flexible as they have the potential to be expanded at any given time by simply adding more panels. 

7. Electricity in Remote Areas 

Solar systems can also be used for electricity in remote areas or places that are difficult to connect to the electricity grid. These are called off-grid systems and are actually a bit cheaper than grid-tied systems because they don’t require an inverter capable of handling the connection to the grid. 

8. Low Maintenance 

Although solar systems have a large initial cost, there is little, or no maintenance needed on the system once installed. Although in dusty areas they may need to be cleaned from time to time. It is very important to get a well-designed system with high quality parts and have it installed by someone who knows what they are doing. If the system is not built out of high-quality compatible parts there is a risk that some parts might be underutilized or overloaded and therefore produce less electricity or not last as long as they should. 

9. Sense of Abundance 

This one is somewhat unexpected but some people report that they feel a sense of abundance after getting a solar system. Saying things like “I’ve stopped worrying about electricity use, both economically and ethically. In essence, I went from a feeling of scarcity to a sense of abundance.” 

While there is tentativeness towards going solar because of the previous misconceptions, going solar has many benefits and in our country and economy today it could really be the next best investment for you. Solar is now available and affordable to everyone and should be encouraged in today’s society. 

Not doing basic solar research

While solar is a topic many people discuss it is important to follow up by doing simple research into how solar works. Solar is a daunting subject as there is an overwhelming amount of information around the topic. A great place to start is how solar panels work as well as finding out how solar panels save you money. Understanding this may also give you more realistic expectations on how solar can improve your day to day life. Don’t be afraid to ask solar installers how the process works, as they understand solar is new to a lot of their clients.

Not outlining how much electricity you use

Understanding your baseline electricity usage is important when considering a solar system. This can help to give context to solar output estimates and how much it will reduce your daily grid consumption. Additionally this can help your household reduce wastage of power by outlining which habits use a lot of electricity, such as leaving lights on. Combining this knowledge will allow your household to not only limit power wastage but also have less reliance on the grid.

Not getting multiple quotes

As solar gains popularity, some installers are inevitably  going to try to sell systems for more due to a knowledge gap. Ensure that each quote is broken down in terms of cost per item and service to get an understanding of what is involved in the process of an installation and further maintenance. Going cheap to save money or expensive to ensure quality is not a guarantee. Cheap panels might not work effectively and expensive panels might be average quality with a high markup. Remember your household is unique in terms of power requirements and structure, ensure the quote is tailored to your needs.

Avoiding solar due to questionable claims made by installers

Every industry has people trying to make big claims in order to make an easy sale. While solar may be new to you, don’t listen to every pitch without doing research yourself. Those who have been sold false dreams may be advocates against solar, make sure that your expectations are realistic as solar can’t necessarily solve all your power issues. It is important to ask those within your reach how solar has impacted their household and take notes.

Buying solar panels and trying to install them yourself

While there is plenty of information on solar and home improvements, doing it yourself is probably not the way to go in this instance. Solar systems need to be designed by an engineer and connected to the household safely by a qualified electrician. Undertaking both the electrical and structural approach yourself could potentially put you in harm’s way. Even if you have the capability to do it yourself it may not yield the same results as professional installation.

Not knowing what size system is ideal for your situation

Many systems are actually too small for the households they are being installed on. While this may be a financial constraint it is often due to underestimating your households power usage. Try to install a system that meets your budget and avoid opting for the smaller system if you can. For those living in estates, gated communities and complexes it is important to find out what size your committee allows a household to install. It is important to also find out which of your roofs can sustain a considerable amount of weight for bigger systems.

Underestimating the future of your solar investment

While going for the less expensive option in the short term might be financially savvy, in the long term it might be a mistake. Solar panels can last over 20 years and this could mean a lot of maintenance for poor quality installations. While expensive isn’t always better it does help when the package includes safety nets such as monitoring and a maintenance service. Once the solar system has been paid off the savings can be spent elsewhere. Furthermore the system is now a part of the house which can be a great selling point when putting your house on the market.

Not having a consumption monitor

A consumption monitor is not a necessity, it is merely a tool that can help save you money. A consumption monitor doesn’t affect your power output it can however show you how much grid power you use versus your solar production. This is the best way to quantify your usage and adjust usage habits, it may even come with an app to help you better understand the data.

While these are not hard and fast rules when going solar, they will help you to reduce your initial spending costs and hopefully save you long term hassle. Solar may be daunting but renewable energy is the way of the future and why depend on grid power that regularly goes up in cost when you can lock in the cost by owning your own solar system.

Why solar power? 

Solar always made sense in South Africa as it gets around 40% more solar radiation than central Europe. Although Eskom produces an overwhelming amount of South Africa’s electricity, the government initially set out many programmes in order to grow the solar industry. The Renewable Energy Independent Power Producer Procurement Programme has shown that South Africa can successfully implement a large-scale, world-class renewable energy programme. This has led to a few large scale industrial solar plants predominantly in the Northern Cape, where some have been funded by Eskom. South Africa’s biggest solar plant is the Jasper Solar Power Project which is a 96MW system in the Northern Cape.  

Why residential solar systems? 

In 2016 residential solar system owners found that they could on average recoup the cost of the solar panel within 5 to 6 years. This window was more palatable for the average consumer as load shedding began to affect the average person. Solar companies are also now more experienced with offering clients more optimal systems that generate electricity more efficiently. More demand has also led to competition in the industry, creating more affordable options. As load shedding and tariffs on electricity continue to impact the livelihood of most South Africans, solar will continue to appeal to an ever growing market.  

Will Solar power fix all my power issues? 

Unfortunately it is still quite expensive to get a solar system big enough to go completely off grid. Having a smaller system that can be more fully utilized more of the time and then using the grid as a backup to cover any spikes in electricity usage is currently the most financially savvy option. A smaller system with a battery bank can easily power essential loads, such as lights, routers, TVs and fridges during power outages. However bigger appliances such as stoves and geysers are normally excluded. Without battery banks solar systems are not reliable enough to cover one from load shedding because solar power production will be reduced during those overcast and rainy days.  

What’s next for solar? 

Solar power technology will continue to develop due to an international push for renewable energy. This means that not only will solar systems continue to drop in price, they will also become more user-friendly, allowing for more households to easily be independent of local grids. Solar panels also have the potential to eventually replace objects such as glass and tiles on buildings and vehicles. 

Solar power is in a good place in South Africa with over 2.5GW of solar capacity installed. New solar companies are regularly entering the market allowing households a choice of suppliers as well as regular monitoring and maintenance to ensure that PV systems run smoothly.  

What you need to know about solar power in South Africa

1. Firstly, solar power systems are becoming more affordable while Eskom electricity continues to increase in price. This has a compounding effect which, in this economy, is adding extra pressure on consumers. Switching to solar offers reduced stress and some savings. The initial installation cost can be unaffordable to some but financing options for solar system are becoming more readily available.

2. Your business could qualify to be eligible for tax deductions for using solar energy. Taxpayers are allowed to deduct the cost of their solar power system from their profits as a depreciation expense. This reduction can also be carried over to the next financial year as a deferred tax asset. In effect, it is the same as getting a 28% discount on the price of your solar system!

3. The installation cost is high but can easily be recouped in a few years through your savings. After which, you can enjoy the benefits of free energy which will save you a lot more money in the long run.

4. Load-shedding is a common occurrence in South Africa and with only Eskom to rely on as an energy source, being affected by load-shedding is inevitable. With solar energy and a battery bank, you won’t be negatively affected by load-shedding and black outs, saving you money and helping you avoid low productivity. This also means longer lasting food, Wi-Fi, hot water and other benefits of continuous energy that Eskom can no longer supply us.

5. You won’t need to invest in a generator, which is expensive and noisy to run, since it would need fuel to run, which is both bad for the environment and extra pricey with the high gas prices we are currently experiencing.

6. You could also feed excess energy back into the grid, and in doing so you’ll receive credits from your municipality or directly from Eskom for selling your excess solar power. This is not available to households in all areas of the country yet though so if you are interested in doing this you need to check if it’s possible in your area.

Let’s look at an actual example

The price for a solar energy system depends on its size, for example, an 80sqm house may use 30kWh of electricity per day and would require at least a 5kW inverter. The cost of such a system would be around R130 000. A full design and quotation process is necessary for each installation to ensure the electricity requirements of the home are met correctly.

So how much will be saved? 

Eskom’s average domestic tariff has risen to just under R2.62 per kW.

On average 20kWh per day could be provided by the solar system while 10kWh per day will still be drawn from the grid. This split depends on the consumption pattern of the household, the position of the solar panels and the size of the battery bank.

Annual savings are therefore R19 126 (365 x 20kWh x R2.62).

The payback period for the solar system is therefore 6.79 years (R130 000 / R19 126).

This means that over the lifetime of the solar system, which can be longer than 20 years, the home owner would see a saving of R252 520 (20 x R19 126 – R130 000) after factoring in the cost of the original purchase price.

With all the electricity price hikes and more to come, load-shedding and the other energy issues we face today, going solar is a great alternative option. Saving you time, energy and money. Eskom was recently granted an average electricity tariff increase of around 18.65% and is expected to implement a further price increase of 12.74% in April 2024, so why not join the solar boom and avoid this by investing in solar today.