Solution
Escape extortionate electricity cost increases with solar
While grid electricity costs are heading for R4/kwh and more, solar comes in at under R1.00/kWh fixed for the next 15-20 years
Residents and businesses in major metros across South Africa are paying massive, double digit increases on their electricity bills – with the average increase for key industrial and urban electricity tariffs at 12.7%.
Every single municipal cost-of-supply study, and Eskom’s inevitable death spiral as more users defect from the grid and its revenue base plummets, confirms that the double digit, above-inflation and extortionate electricity tariff hikes are here to stay for years to come.
As electricity customers respond by moving to self-generation and alternative energy sources, the cost of Eskom’s electricity supply will continue to escalate at massive above inflationary increments as Eskom – and municipalities – scramble to make up for the declining sales volumes to cover their fixed costs and debt-burden.
The reality is that while grid electricity costs are now heading for R4/kwh and more, solar comes in at under R1.00/kWh fixed for the next 20 years, with many solar users amortising their system costs in under 4 years, and then enjoying completely free electricity for another 15 years and more.
Your grid cost trajectory if you do nothing
Over the next three years, Eskom’s approved tariff hikes combined equate to a 25% increase. Currently, customers paying R3000 per month for electricity will pay R800 more by 2027 for the same amount of electricity. On a current bill of R5000, you will be paying R1300 more – R6300. This does not even factor in that municipalities are likely to add 3-5% on top of any Eskom increases. Households and businesses have faced steeply rising electricity tariffs since 2010. While inflation saw prices increase by 196% over the period, electricity tariffs rocketed by 408%. This is an average of about 15% a year.
| Current Electricity 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 10 000,0 | 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 4.7kW solar array at a cost of R129 000.
- Solar PV system generates on average 24kW per day (720kW 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 R2700/pm that you won’t be paying on your municipal electricity account. That’s R33 000 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 through Nedbank MFC, over 96 months, your monthly repayments will be around R2350 per month (subject to your credit rating and rates applied). That’s less than what you are saving every month with solar.
- 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 R230k on grid-electricity costs over five years, almost double the cost of your R129k 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 8600 kWh in the first year.
- At a 1% efficiency decline per annum, you will generate 80% of this – 7040 kWh in year 20.
- So the average over 20 years is 7820kWh per annum x 20 = 156 000 kW over 20 years.
- The cost of the system is R129 000 so the average cost per kWh is R0,82 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 40kWh of battery back-up and a 32kW solar array at a cost of R483 000.
- PV system generates on average 160kW per day (4800kW per month).
- Batteries provide 32kWh 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 R15 000/pm based on a 25-day work month, that you won’t be paying on your municipal electricity account. That’s R180 000 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 R1.14 million on grid-electricity costs over five years. That’s double 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 84 months, your monthly repayments will be around R9 600 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 R5 400 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.
- 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 key benefit is that you are redirecting your grid electricity spend – a pure consumption cost – to acquiring a solar asset that will continue to generate savings and energy independence for many years after the finance term is settled, and you get to hedge your electricity costs for the lifespan of your system. It’s the kind of financial and energy security that every home and business needs – and it makes a significant contribution to reducing your carbon footprint and environmental impact.
Solar Solutions for Business
One Energy’s national South African footprint allows us to facilitate national renewable energy projects for companies that want a standardised installation and national roll out across all their operations.
Beyond the requirements for uninterrupted power supply in terms of business operations and productivity, there is a crucial need for businesses to make the green transition to more sustainable energy solutions like solar and radically reduce their carbon footprint in line with ESG demands. For many businesses and industries, this is an imperative if you want to improve your green credentials and ensure access for your products to global markets – where the drive to nett zero is an overwhelming factor in trade decisions.
We provide solar and battery back-up solutions for businesses of all sizes, from SMEs to retail stores and shopping centres, commercial offices, medical practices, warehouses, manufacturing workshops, food processing facilities, educational institutions, working farms and many more.