Eskom’s solar clampdown backfires - costs rise, but demand refuses to die

Key topics .New tariffs add steep fixed charges for solar usersRegistration rules push up installation costsDespite hurdles, some installers see record sales.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 at 5:30am 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..By Hanno Labuschagne.Solar power installers and distributors are split over the impact Eskom’s new tariffs and regulatory uncertainty around grid-tied system approvals are having on demand for solar power systems in South Africa.At least one major distributor and a large solar power installer believe the power utility’s policies are harming the industry’s growth.However, another believes that Eskom’s strategy is leading to even greater adoption of privately-generated power.The power utility’s requirements for approving small-scale embedded generation (SSEG) have created the impression that it wants to discourage the use of self-generated power.The criteria make it substantially more expensive and complex to get an SSEG system approved than the generally accepted practice of getting an electrical certificate of compliance (CoC) for the installation.Afriforum and Organisation Undoing Tax Abuse have advised Eskom Direct customers to hold off on registering their systems, arguing that some of Eskom’s registration criteria are unlawful.A key continuation is its insistence that systems need sign-off by professionals registered with the Engineering Council of South Africa (Ecsa).This alone makes the installation tens of thousands of rand more expensive, without factoring other requirements like providing a street-side box to isolate the system from the grid.The power utility’s latest annual tariff adjustments, which came into effect on 1 April 2025, also introduced substantial fixed capacity charges.These tariffs represent a major shift in electricity tariff philosophy — from encouraging less reliance on grid electricity with energy-conscious usage to wanting people to consume as much of its power as possible.Energy product distributor Rubicon told MyBroadband that the constant shifting of the goal posts on pricing made sensible investments in alternative energy difficult in 2025.“Households are under increasing pressure to service debt,” Blandford said. “Now that potential savings for electricity are also under threat, it may discourage many from installing solar systems.”Blandford said Eskom’s idealised registration was another hurdle which may deter clients due to the cost involved in obtaining an engineer’s sign-off.Demand still healthy for some.Solar installation and rental company Stage Zero agreed that Eskom and some municipalities’ strenuous solar registration rules were inhibiting outright system sales.“Any hurdles such as installation fees, long contract terms, remedial work, and other compliance fees — including for CoCs, AMI meter replacement, and PV registration — killed sales,” said Stage Zero co-founder and CEO Abraham van Merwe.Van der Merwe said the RTP was also making solar less attractive. “Smaller customers now also spend more on electricity, putting them under further financial pressure,” he said.However, he maintained that Stage Zero’s pivot towards long-term electricity savings rather than backup power as a selling point had stimulated the company’s rental business.“Our changes definitely worked for us, and our sales have gradually trended upwards towards the load-shedding days,” said Van der Merwe.“In July, we had our best sales month ever, and August was very close to our peak as well, so I guess we’re less affected than most of our peers.”The company also handles all the required distributor compliance on behalf of customers, taking concerns about registration hassles out of the equation.A different experience.Another major solar power installer — Alumo Energy — has also seen its sales boosted by Eskom’s tariff changes.“The restructuring is actually accelerating demand among those who want a reliable, cost-efficient power source that protects them from unpredictable tariff hikes,” said chairman Rein Snoeck Henkemans.“We’re seeing more households investing in solar solutions to gain long-term price stability and avoid future exposure to Eskom’s costs and reliability issues.”“Homeowners are becoming more conscious of their energy independence and are viewing solar as a strategic investment rather than just a short-term solution.”Snoeck Henkemans acknowledged that although Eskom and municipalities’ SSEG registration processes were at times strenuous, they were not a complete turn-off for customers.“The general feeling out there is that customers are frustrated with the process, and we have seen a fairly large backlog at the municipalities we are dealing with,” he said.“While there are additional registration requirements and (high) costs involved, we manage that process for our clients.”.*This article was first published by MyBroadband and was republished with permission

Eskom’s solar clampdown backfires - costs rise, but demand refuses to die

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