Residents in major metros across South Africa are facing substantial double-digit increases in their electricity bills starting from 1 July. The average increase for key industrial and urban electricity tariffs stands at 13.29%.
Eskom’s endless blues
One Energy’s Teresa Kok.
Every municipal cost-of-supply study and Eskom’s declining revenue base, exacerbated by more users defecting from the grid, confirm that these above-inflation and exorbitant electricity tariff hikes will persist for years to come, contributing to Eskom’s inevitable decline. This is according to the analysis of Director for One Energy, Teresa Kok.
She explains, “As electricity customers increasingly turn to self-generation and alternative energy sources such as rooftop solar PV, battery energy storage, gas for cooking, and solar geysers, the cost of Eskom’s electricity supply is poised to rise steeply, well above inflation. Both Eskom and municipalities are scrambling to offset declining sales volumes and cover their fixed costs and debt burdens.”
Alternative hi- tech power solutions- Solar PV tech system
“In reality, while grid electricity costs are approaching R4/kWh and higher, solar energy comes in at less than R1.00/kWh fixed for the next 20 years. Many solar users recoup their system costs in under 4 years and then benefit from completely free electricity for another 15 years or more.” she says
Kok breaks down her analysis as she adds a bit of meat to it:
Your grid cost trajectory if you do nothing
Taking a conservative viewpoint that Eskom will continue to increase prices by at least 12%, with municipalities likely to add a further 2-3% on top, equating to a 15% increase per annum, the unfortunate reality is summarized below, without considering any solar intervention: In less than four years, your monthly electricity bill will double.

Current bill
2024/25
(from 1 Jul)
2025/26
2026/27
2027/28
2028/29
Total spend over 5 years

R 2 000,00
R 2 300,00
R 2 645,00
R 3 041,75
R 3 498,01
R 4 022,71
R 186 089,72

R 3 000,00
R 3 450,00
R 3 967,50
R 4 562,63
R 5 247,02
R 6 034,07
R 279 134,58

R 4 000,00
R 4 600,00
R 5 290,00
R 6 083,50
R 6 996,03
R 8 045,43
R 372 179,45

R 5 000,00
R 5 750,00
R 6 612,50
R 7 604,38
R 8 745,03
R 10 056,79
R 465 224,31

R 8 000,00
R 9 200,00
R 10 580,00
R 12 167,00
R 13 992,05
R 16 090,86
R 744 358,89

R 10 000,00
R 11 500,00
R 13 225,00
R 15 208,75
R 17 490,06
R 20 113,57
R 930 448,61

R 15 000,00
R 17 250,00
R 19 837,50
R 22 813,13
R 26 235,09
R 30 170,36
R 1 395 672,92

 
What can I expect to save with a solar PV system?
Residential case study: Current electricity bill of R3000 (around 810kWh per month / 27kWh per day, based on tariff of R3,70/kWh).

Invest in 5kW Fox ESS hybrid inverter, with 10kWh of battery back-up and a 5kW solar array at a cost of R140 000.
Solar PV system generates on average 25kW per day (750kW per month).
Batteries provide 9kWh of usable back-up power to essential and night-time loads.
Solar system takes you 95% off the grid – that’s R2800/pm that you won’t be paying on your municipal electricity account. That’s R33 600 per year, in year 1, without factoring in tariff increases.
Your solar system fully pays for itself in 4 years. After this, every kWh your system generates is free electricity and an incredible investment in your grid independence and financial security.
On our solar finance option, or rent-to-own option, over 72 months, your monthly repayments will be around R3000 per month (subject to your credit rating and rates applied). By year 2, you’ll be paying less on your finance repayments than you would be on grid-electricity costs and putting money back in your pocket.
There is no annual escalation in either the solar finance or rent-to-own solution and you fully own your system at the end of the finance period, with no hefty buy-out clauses or penalties for early settlement.
With no solar intervention, you would have spent R280k on grid-electricity costs over five years, double the cost of your R140k solar system, with absolutely zero return on investment or ongoing financial benefit to you.

How do we get to less than R1.00/kWh fixed for 20 years?

Using the above example, you will generate 9000 kWh in the first year.
At a 1% efficiency decline per annum, you will generate 80% of this – 7200 kWh in year 20.
So the average over 20 years is 8100kWh per annum x 20 = 162 000 kW over 20 years.
The cost of the system is R140 000 so the average cost per kWh is R0,86 fixed for 20 years. And even after 20 years, your panels will still generate at 80% of the initial efficiency.

Commercial case study: Business with current electricity bill of R18 500 (around 5000kW per month) based on tariff of R3,70/kWh).

Invest in a 30kW Fox ESS hybrid inverter, with 32kWh of battery back-up and a 30kW solar array at a cost of R510 000.
PV system generates on average 156kW per day (4680kW per month).
Batteries provide 26kWh of usable back-up power to essential and night-time loads.
Solar system takes you around 95% off the grid – in monetary terms, that’s R17300/pm that you won’t be paying on your municipal electricity account. That’s R207 600 per year in year 1, without factoring annual grid cost increases.
Your solar system will fully pay for itself in 2.5 years! After that, every kWh your system generates is free electricity – an incredible investment in massive cost savings that every business needs! And you will have secured your electricity costs and security of supply for your business.
With no intervention, your business would have spent R1.6million on grid-electricity costs over five years. That’s more than three times the cost of your solar PV system, with absolutely zero return on investment or ongoing financial benefit to your business.
On a rent-to-own option for business, over 72 months, your monthly repayments will be around R11 100 per month (subject to your business credit rating and interest rates applied). This repayment is much less than what you are saving on monthly electricity costs!
Your monthly rental payments are fully amortised by your monthly savings on your electricity costs with R7000 spare change, you fully own the system at the end of the rent-to-own period with the payment of just one month’s additional rental, and there is no annual escalation in the rental with One Energy’s rent-to-own solution.
As another big financial incentive, your business can take advantage of the Section 12B tax incentive.  Section 12B of the Income Tax Act No. 58 of 1962 allows for a tax deduction in respect of certain qualifying assets (owned and brought into use after 1 January 2016) to reduce the taxable income of the taxpayer. These qualifying assets must be used for purposes of trade in the generation of electricity from renewable sources. For the period 1 March 2023 to 28 February 2025, the Section 12B allowance has been increased from 100% to 125% and no maximum cap on the output of the solar installation.
If your business is VAT registered, you can claim/offset the input VAT back against your output Vat for the business.

In both case studies, the main benefit is shifting from spending on grid electricity to acquiring a solar asset. This investment continues to save money and provide energy independence long after financing ends. You also protect against future electricity cost increases throughout the system’s lifespan, offering crucial financial and energy security for homes and businesses. Moreover, it significantly reduces your carbon footprint and environmental impact. It’s a win win.The post Solar Energy at R1.00/kWh, Electricity to Increase to R4/kwh first appeared on IT News Africa | Business Technology, Telecoms and Startup News.