South Africa updates electricity pricing after 18 years
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The South African government recently released a new electricity pricing policy, the first update in 18 years, to govern how Eskom, municipalities, and private power producers set prices.
The policy aims to ensure fairness and transparency while securing funds for system maintenance and assistance for low-income households. It addresses changes in the energy sector, including the rise of private power generation and rooftop solar panels, by outlining how these sources should contribute to grid maintenance.
The new rules seek to prevent costs like unpaid bills and electricity theft from being passed on to customers through price increases. About 10 million households in South Africa qualify for free electricity each month, but the new policy doesn’t guarantee an increase to this amount, leaving funding and implementation unclear. The government will review funding levels annually to determine how much free electricity to provide.
The policy also acknowledges the growing number of independent power producers and aims to ensure customers don’t unfairly cover the costs of others’ losses. Eskom, the state-owned utility, has seen recent tariff increases, 8.76% for direct customers and 9.01% for municipalities starting in 2026, but electricity prices have risen 1,172% in the last two decades, significantly outpacing inflation.
Despite a 6.2% drop in sales, Eskom reported a profit of over R30 billion due to these increases and is increasing staff numbers to address skills shortages and improve grid stability.
