Dark clouds gather over solar power users in South Africa

Eskom has confirmed that it intends to charge solar power users in South Africa to remain connected to the national grid.

This is one of several proposed structural changes to its retail tariffs, which the power utility has explained are necessary for its future sustainability.

Nersa published Eskom’s retail tariff adjustment application for public comment on Thursday, 7 November 2024.

“Customers with solar rooftop solar PV connected to the grid who use Eskom-supplied energy as a backup, known as the ‘Eskom Battery’, on cloudy days, at night, and during the morning and evening peaks will still be required to pay for using the Eskom network,” Eskom said.

“The application does not include customers who have completely disconnected from Eskom’s grid and have no Eskom connection or meter.”

According to Nersa’s consultation document for Eskom’s retail tariff plan submission, the power utility wants to introduce a single energy charge, an ancillary network charge, a network demand charge, and a service and administration charge.

“This is a proposed change from the current tariff, where a combined service and an administration charge is reintroduced,” Eskom said in its submission.

These are applicable regardless of usage.

The proposed changes would result in households with rooftop solar that are still connected to the grid and low-consumption residents paying substantially more for electricity than they currently do.

Eskom has provided a comparison tool that allows customers to see how their monthly bill would change under the proposed changes.

It shows how fixed charges will change based on monthly energy consumption.

For example, customers currently pay R196 in fixed fees even if they consume no electricity generated by Eskom. On Eskom’s most recent plan, this would increase by 183% to R554.

On average, 400kWh consumers pay a bill of around R1,178 per month. With Eskom’s proposed changes, their bills would increase by 25% to R1,476.

However, heavy power users will benefit from the proposed changes. For example, households consuming 900kWh per month currently pay R2,853.

These customers would see their monthly bills reduced by nearly 8% to R2,629.

Other proposed changes include removing the inclining block tariff, which it says will support affordability and provide greater access to electricity services. It also wants to let customers with solar panels export electricity back to the grid to reduce their bills.

The inclining block tariff structure penalises higher-usage customers with higher energy charges. It wants to replace the structure with a flat charge for all consumption.

In its statement, Eskom group executive for distribution, Monde Bala, said it is critical that the public engage in the Nersa’s public consultation process to ensure that tariffs are as fair as possible for all residents.

“The electricity supply industry is undergoing fundamental changes that will set the course for economic growth and prosperity in the years ahead,” said Bala.

“The proposed tariff changes aim to restructure existing tariffs and avoid the creation of unintended subsidies.”

“Eskom will not generate additional revenue from the proposed tariff restructuring but will rebalance the charges while remaining within the 2024/25 costs already approved by Nersa,” he added.

Eskom first proposed the controversial changes in its retail tariff plan submitted to Nersa in early 2021. However, it has made several revisions since.

It argued that higher fixed capacity charges would make its tariffs more cost-reflective.