Charging solar power users higher prices in South Africa — Eskom’s plans

Eskom doesn’t plan to slap customers using solar panels with any additional usage tariffs, but it may need to charge an upfront fee.

An Eskom spokesperson told MyBroadband that the power utility might take on extra work relating to the compliance regulations for solar installations.

“There is no intention to charge customers with solar any additional tariff charges not applicable to other customers. Eskom treats all customers in a non-discriminatory manner,” they said.

“It is possible that additional work may be required by Eskom to ensure the solar installation is a technically compliant connection.”

The spokesperson said Eskom would treat solar users the same as any other customer adjusting their installation.

“Any such associated costs will be raised as an upfront charge, the same as any other customer that makes changes to their installation,” they said.

MyBroadband reached out to the National Energy Regulator of South Africa (Nersa), and it declined to provide comment.

“Nersa is unable to comment at this stage as the licensee is currently piloting this tariff,” the regulator’s communication head Charles Hlebela said.

Eskom proposed splitting energy tariffs into fixed and variable costs last year.

The state-owned power utility said this was to ensure it remained attractive compared to alternative energy sources such as self-generated solar power.

The change would see South Africans billed based on volumetric energy usage, with an additional fixed daily network charge independent of how much Eskom electricity is consumed.

By splitting its tariffs, solar power customers would need to pay Eskom’s fixed cost to remain connected to the grid regardless of their usage — and their solar power system would not save them nearly as much money.

Its split-tariff structure would also address the increased demands solar power users placed on the grid, Eskom said.

The power utility said that those who use solar power generate most of their electricity during the day, resulting in Eskom ramping up more rapidly to meet the evening demand.

This has significant adverse effects on the power system, Eskom explained.

While solar power systems could use battery packs to store excess energy for night-time usage, this raises the price of solar installations considerably.

Earlier this year, Nersa announced that it planned to adjust South Africa’s electricity pricing methodology. News emerged that this could see solar power users pay ten times more for electricity.

The regulator recently adopted a principles document which included categorising South African power users into three main groups:

  • Big power users — characterised by consistent day and night usage.
  • Normal power users — characterised by high demand in the mornings and evenings, with lower power usage during the day.
  • On-grid solar and self-generating power users — characterised by fluctuating power demands dependent on the availability of sunlight.

Nersa also adopted a principle that each user category must pay tariffs based on the actual cost of providing them with electricity.

The impact will see the most prominent power users pay substantially less than their current rate.

Eskom slammed Nersa’s principles document, saying they could not, on their own, be used to determine revenue or tariffs.

“It deviates from a well-established process of first determining revenue, based on a clear methodology, then doing a cost allocation of this approved revenue to customer classes and then designing tariffs,” the utility told MyBroadband.

Now read: Cut your Eskom bill and protect against load-shedding for R2,500 per month

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Charging solar power users higher prices in South Africa — Eskom’s plans