Eskom one step closer to punishing solar users — but there’s a catch

The National Energy Regulator of South Africa’s (Nersa’s) Electricity Subcommittee (ELS) has recommended that the retail electricity tariff adjustments in Eskom’s Retail Tariff Plan 2025 (RTP 2025) be broadly approved.

This is according to EE Business Intelligence managing director and energy expert Chris Yelland, who noted that the ELS had recommended some limitations.

Eskom submitted its amendments to the RTP in November 2024, proposing a major shift in the balance of fixed and variable charges’ contributions to the state-owned power utility’s revenue.

This includes introducing a generation capacity charge (GCC), which, in its proposed form, would significantly increase the cost of merely having a grid connection.

“The only change recommended by the ELS to Eskom’s RTP 2025 was that the fixed monthly GCC applied for by Eskom for its retail tariffs should be phased in over the next three years for reasons of affordability,” said Yelland.

The ELS recommended that the generation capacity charge be limited to 20% of what Eskom had applied for in 2025/26 and to 30% in 2026/27.

“The recommendation for the GCC in the years thereafter is unclear,” added Yelland.

For reference, Eskom proposed a charge of R5.99 per point of delivery (PoD) per day. For households with a single PoD, this charge will amount to roughly R182 per month.

However, if the board approves the ELS’s recommendations, Eskom can only charge R1.20 per PoD per day, reducing this monthly charge to around R36.

The next step will be for the ELS to approach Nersa’s board for approval in the coming weeks.

Eskom’s reasoning behind introducing the GCC is that customers like grid-tied solar users consume small amounts of electricity and then use the grid as a “battery” in times of low solar generation capacity.

It argues that these users are effectively subsidised by those who consume large amounts of electricity.

“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,” the utility said.

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

Nersa’s consultation document for Eskom’s RTP 2025 submission showed that the power utility wants to introduce a single energy charge, an ancillary network charge, a network demand charge, and a service and administration charge.

All of these would be applicable regardless of usage.

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

If approved, the changes will result in households still connected to the grid and with rooftop solar, and low-consumption residents paying substantially more for electricity than they currently do.

Eskom offered a comparison tool that allowed customers to calculate how their monthly bills would change if its plan was approved. The tool shows how fixed charges change based on monthly consumption.

Currently, customers pay R196 in fixed fees even if they don’t use any Eskom-supplied electricity during the month. With the latest proposed amendments, this would increase by 183% to R554.

Currently, consumers using 400kWh per month pay a bill of around R1,178. With the proposed amendments, this will increase by around 25% to R1,476.

Heavy power users will benefit from the changes. Households currently consuming 900kWh on average pay R2,853 per month. This will reduce by nearly 8% to R2,629 per month.

The power utility first proposed these controversial changes in its RTP submitted to the regulator in 2021, and it has undergone several revisions since.

Eskom argues that higher fixed capacity charges will make its tariffs more cost-reflective.