Municipalities and electricity is a fraught and complex issue in SA, mainly because so many municipalities depend on the high markups to fund general expenditures. It's a fundamental weakness in SA's post-1994 municipal financing regime.
Municipalities buy from the state-owned bulk generator (Eskom) and resell to retail customers after 120%-250% markup. Many municipalities are utterly dependant on their electricity profits to fund other non-electricity municipal expenses.
Until a new way is found to fund municipalities in SA, we will see these awful distortions in the market, such as the reluctance to get on board with solar pv.