Newly increased Eskom tariffs spark outrage
NERSA’s approval of Eskom’s tariff hike has sparked backlash as political parties, businesses, and economists push back.
The National Energy Regulator of South Africa (NERSA) has once again approved an electricity tariff increase for Eskom, triggering widespread concern over rising power costs.
The regulator has sanctioned a 12.7% increase for the 2025/26 financial year, followed by a 5.36% hike in 2026 and 6.19% in 2027.
This decision is expected to place additional financial strain on South African households already struggling with the high cost of living.
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Eskom originally applied for a far steeper 36% increase for direct customers and 44% for municipalities, but NERSA intervened to cap the rise to an effective 24% over three years.
While this is lower than the initial request, it is still a substantial burden for families who have seen electricity costs surge by 34% over the past two years.
According to Marc du Plessis, executive head of Standard Bank’s LookSee, the steady increase in electricity prices is eroding the benefits of lower inflation and recent interest rate cuts, placing a long-term strain on household budgets.
Public dissatisfaction over the rising costs was evident during NERSA’s hearings, which saw widespread participation from concerned South Africans.
A shift towards solar energy
As electricity prices continue to climb, solar power is gaining traction as a viable alternative. Many South Africans are seeking relief through solar energy, which offers a sustainable way to cut monthly electricity costs and protect against future hikes.
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To facilitate the transition, Standard Bank is offering a Solar Loan under the Energy Bounce Back Loan Guarantee Scheme, providing competitive interest rates and flexible repayment terms until its expiration on February 20, 2025.
Additionally, LookSee has introduced an innovative solution that converts existing electric geysers to solar-powered systems, helping households reduce electricity costs by up to 40% without requiring costly plumbing modifications.
With interest in solar solutions growing, industry experts expect this trend to accelerate as South Africans seek long-term financial relief and energy security.
Economic impact and expert insights
While many have welcomed NERSA’s decision to limit Eskom’s requested tariff hike, economists warn that the underlying issues at Eskom remain unresolved.
Professor Raymond Parsons from the NWU Business School emphasizes that even with a 12.7% increase, municipal surcharges will further drive up electricity costs for businesses and consumers.
“The higher electricity tariffs will encourage the search for alternative energy solutions and reduce reliance on Eskom,” Parsons explains. “However, this decision does not address Eskom’s long-term financial stability issues.”
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The continued electricity hikes are also a major concern for economic growth, particularly as businesses struggle with high production costs and global competitiveness.
ArcelorMittal’s recent announcement to close parts of its operations citing electricity costs as a key factor—highlights the broader economic risks tied to energy pricing.
Political reactions and calls for reform
Political parties have strongly opposed NERSA’s latest tariff hikes, arguing that they will increase financial hardship for struggling consumers and businesses.
The DA has been vocal in its opposition, with DA spokesperson Kevin Mileham stating that rather than raising tariffs, Eskom must be held accountable for its operational inefficiencies and financial mismanagement.
ActionSA Member of Parliament Alan Beesley condemned the hikes, warning that they will cripple households, stifle businesses, and deepen South Africa’s economic crisis.
“South Africans should no longer have to pay for government corruption and failure. It is time for accountability—those responsible must be jailed, and the incompetent must be removed,” said Beesley.
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The Economic Freedom Fighters (EFF) also denounced the decision, calling it unjustified and harmful to millions of struggling South Africans.
EFF national spokesperson Leigh-Ann Mathys stated that they will not stand idle while South Africans are forced to choose between electricity and survival.
The party is demanding an immediate review of the tariff approval process and insists on sustainable energy investments to reduce dependency on Eskom.
