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.

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.