Eskom’s tariff shock hits middle-class households hardest

Key topics:Eskom fixed fees surged after RTP approval, raising household bills sharplySmall/solar households hit hardest, with fixed charges up ~142% in 2 yearsPricing shift removed IBT, penalising low use while favoring high consumers.By Hanno Labuschagne.Eskom’s drastic fixed electricity capacity fee increases have pushed up many small middle-class households’ bills by more than 40% in two years.Some households with grid-tied solar power systems capable of supplying the vast majority of their electricity demand have seen their bills double.After many years of lobbying, Eskom had its retail tariff plan (RTP) approved by the National Energy Regulator of South Africa (Nersa) in early 2025.The RTP introduced sweeping changes to how Eskom recovers costs, with a much larger proportion coming from fixed daily charges, independent from how much energy a customer consumes..Read more:.Frans Cronjé: As the 1910 Union disintegrates, only upside for SA’s middle class.In addition to its daily network capacity charge, it introduced a generating capacity charge and service and administration fees.Eskom argued that customers with lower energy consumption were being subsidised by people who used more electricity.It specifically focused on solar power users who intermittently used the grid as a “battery,” arguing that they had to spend just as much maintaining their grid connections as customers without solar.The reality is that its RTP also negatively affected small households with low to moderate consumption, regardless of whether they had solar power.Nersa approved the RTP to be implemented in a phased manner to cushion consumers from the significant impact of the fixed charges.Most households on Eskom Direct that don’t qualify as indigent have a 16-amp single-phase connection, placing them on the Homepower 4 tariff.These types of properties are often home to a single person, a couple, or a small family that consumes around 500 kilowatt-hours (kWh) or less per month.In the first year of the adjustments, which started on 1 April 2025, the total fixed costs for customers on Eskom’s most common residential tariff plan increased by 88%.Eskom Homepower 4 customers’ total fixed cost over a month jumped from R221.70 to R417. After another 28% increase implemented on 1 April 2026, the fee jumped to R535.80.Therefore, the fixed component of Homepower 4 customers’ bills has increased by just about 142% in two years, as shown in the table below..Sending consumers mixed signalsEskom also scrapped its incline block tariff (IBT) mechanism, which levied lower variable energy charges for the first 600kWh of consumption and substantially higher charges for consumption over 600kWh.With these moves, Eskom’s pricing signal abruptly shifted from encouraging and rewarding energy efficiency to punishing it, while rewarding those who use more of its product with lower effective hikes..Read more:.Eskom wants to cut power to owing municipalities: households may pay the price.Many households invested in alternative energy, including solar power and gas for cooking and heating water, to reduce their reliance on Eskom’s unreliable electricity.Eskom itself encouraged people to be more efficient, both in public campaigns and with the IBT tariff structure.With the power cuts largely eliminated thanks to a substantial reduction in demand, Eskom has turned on these customers.MyBroadband compared the bills of Eskom residential users before the RTP implementation on 1 April 2025 and after the second round of adjustments on 1 April 2026.Over the last two years, Eskom’s average electricity tariffs have increased by a compounded 22.6%, but that figure excluded significantly lower preferential tariffs paid by some of its biggest customers.We found that a Homepower 4 customer would have needed to consume about 750kWh to see that average on their bill.A two- or three-person household that consumed 500kWh per month would pay R2,314, up 42% from their previous bill of R1,633.Conversely, households with substantial grid electricity demand, many of whom could afford high electricity prices, have seen increases much lower than the average.A household that consumes 1,000kWh, for example, is only paying about 10% more for its electricity than it was before April 2025.Homepower 4 customers who make minimal use of the grid, which could include those with a fit-for-purpose solar power system, could be paying around double their fees from pre-April 2025.They will pay R714 in fixed fees and 50kWh of energy. That is the same amount of electricity that indigent households get for free every month.These customers are effectively paying R14.28 per kWh, compared to the R0.62 preferential rate Eskom wants to give the Samancor and Glencore Merafe smelters, pending Nersa’s approval.Eskom Homepower 4 bill changes after RTP implementation.This article was first published by MyBroadband and is republished with permission..Sign up for your early morning brew of the BizNews Insider to keep you up to speed with the content that matters. The newsletter will land in your inbox every morning on weekdays. Register here.Support South Africa's bastion of independent journalism, offering balanced insights on investments, business, and the political economy, by joining BizNews Premium. Register here.If you prefer WhatsApp for updates, sign up to the BizNews channel here.

Eskom’s tariff shock hits middle-class households hardest

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