Solar users face R50,000 Eskom pain in South Africa

Eskom is changing its cost structure, which means that many South Africans with solar installations could be paying thousands to register their systems with the utility.

As part of Eskom’s restructuring of residential electricity tariffs, residential solar users will be required to install smart meters and register with the utility, all at their own expense.

MyBroadband readers have reported that they were quoted between R27,000 and R50,000 to comply with Eskom’s requirements.

The deadline for registration is 31 March 2026, after which penalties will be imposed and users disconnected.

At the same time, Eskom is increasing its electricity prices for 2025/26 by 12.74%, and while this is significantly lower than the 36% hike they initially asked for, it will still hit households hard.

Energy analyst and EE Business Intelligence managing director Chris Yelland explained on The Money Show with Stephen Grootes that solar users will be paying a sizeable amount.

“There are going to be significant costs for customers as they register their systems with Eskom,” Yelland said.

“The reality is that Eskom requires you to have permission from them as the network provider before you connect a solar PV and battery energy storage system to their network.”

“Now, in the past, they have really not been in a position to enforce this.”

Yelland said that around 18 months ago, Eskom stated that there were around 27,000 low-voltage solar PV and battery energy storage installations connected to the network without the necessary permission from Eskom.

“This is a compliance issue. You have to meet certain compliance conditions before they will connect you, and there are very significant costs involved.”

For example, Eskom has introduced a new tariff called the Homeflex tariff, a time-of-use (TOU) tariff system for residential customers, particularly those with solar photovoltaic (PV) and battery energy storage (BES) systems.

This is one of three main suites of residential tariffs introduced by Eskom, with the others being Homelight and Homepower.

The Homelight tariff is intended for low-income residential customers, while the Homepower and Homeflex tariffs are intended for middle- and higher-income residential customers.

Homeflex is specifically targeted towards customers who can respond to time-of-use pricing signals by shifting their energy consumption to standard and off-peak periods of the day through selective use of home appliances.

“Whether you export power into the grid or not, you are required to have an electricity meter that can communicate remotely, that can handle imported and exported energy into the grid, that can implement time of use tariffs, and these meters are quite expensive,” Yelland said.

“Not only are they expensive, but you may need a kiosk to put them in. You need installation costs.”

“You need to get a quotation from Eskom before you even start, and, funnily enough, just to get a quotation, you have to pay Eskom money.”

In addition to the costs of the meter, installation, and kiosk, a professional engineer must also sign off on everything, which Yelland said could cost as much as R20,000.

“Finally, you have to pay Eskom a connection fee to come out and connect you,” he said.

Where municipalities are concerned, most of them do not have tariffs for exporting power into the grid.

Even if they do, they are usually not in a position to enforce compliance in any shape or form.

“In many municipalities, people just do their own thing, and, technically, they don’t have permission to connect to the network, but the network provider is not in a position to go out and check this and inspect it and enforce compliance.”

“So there is a very large number of technically non-compliant installations.”

“It’s like e-tolls. If you have 27,000 non-compliant, technically illegal installations, the network provider is just not in a position to enforce it. And then the whole thing falls into disuse, and gets abandoned, as has happened with e-tolls.”

Eskom shoots itself in the foot

Many people in these rural areas are already struggling to afford Eskom’s electricity prices.

With the 12.74% increase looming, going off the grid completely is becoming an increasingly attractive option for many people.

At the same time, Eskom is pushing solar users to pay up while giving them no value in return.

For many people, especially in rural areas, the money they would be paying towards Eskom would be much better spent on improving their systems, buying batteries, or investing in a petrol or diesel generator.

“That is what many people in rural and semi-rural environments are thinking about,” Yelland said.

“This combination of a battery, solar PV and a generator is the basis of what is known as a microgrid, and microgrid installations are becoming more and more economically viable.”

Yelled added that even Eskom is promoting microgrids for rural installations where a grid connection is too expensive.

“These things are becoming more economically viable as the price of Eskom grid electricity gets higher and higher, and people start defecting from the grid with very significant negative consequences.”

A version of this article was first published by Daily Investor and is reproduced with permission.