Looming Eskom tariff hike: Making sense of energy independence for South African businesses

THE National Energy Regulator of South Africa recently approved average tariff increases of 12.74% for Eskom direct customers (effective April 1, 2025) and 11.32% for municipalities (effective July 1, 2025).

- MATTHEW CRUISE

These adjustments, coupled with structural changes to tariffs, including an overall increase in fixed charges and winter energy time-of-use peak energy charges for large industry, mining, and commercial customers, are forcing businesses to re-evaluate their energy strategies.

The current energy climate in South Africa presents both challenges and opportunities for businesses.

The reality of persistent tariff increases and the ongoing need for energy security means that relying solely on Eskom is no longer a viable long-term strategy for many industrial and commercial operations.

Businesses are also facing a threat of tariffs being added to goods they export to the EU and US, should those goods be produced through 'dirty' energy sources such as Eskom's coal station dominated generation portfolio. The Carbon Border Adjustment Mechanism (CBAM) tariff will increasingly drive businesses to switch to clean, renewable energy in their production process.

Internal competition between the manufacturers of solar panels in China is good news for local businesses, as this keeps driving down the cost of the panels. It makes going solar an entirely affordable option, but we recommend making this move only after careful consideration and planning.

Moving from grid-dependency to solar independence

The decision to move off-grid through solar PV is a strategic one, driven by several key factors: