In March, the National Energy Regulator of South Africa (NERSA) approved the Eskom tariff adjustments for Financial Year (FY) 2026, with the 2025/26 tariff increase and changes to the tariff structures. This means that, with effect from 1 April 2025, the tariffs for Eskom direct customers will increase by 12.74%, and tariffs for municipal bulk purchases will increase by 11.32% with effect from 1 July 2025.
Eskom says the new tariff structure is intended to ensure equitable cost recovery, eliminate unintended cross-subsidies, and facilitate responsible integration of alternative energy sources.
Eskom described the tariff adjustments as a “necessary shock to the system”. The impact of higher electricity prices will be felt by all users.
However, the utility makes the point that the well-defined tariff structure is intended to ensure equitable cost recovery, eliminate unintended cross-subsidies, and facilitate the responsible integration of alternative energy sources.
Eskom said in a statement that the updated tariffs will support the transformation of the electricity supply industry by aligning prices with NERSA-approved costs for generation, transmission (for the National Transmission Company South Africa (NTCSA)), and distribution services, and still promote affordability and equity for all customers.
The NERSA approval enables Eskom to implement simpler tariffs for low-consumption households and municipal bulk purchases. The new tariffs will ensure that customers pay for costs they incur, reinforcing a stronger user-pays principle in electricity pricing with the removal of unintended subsidies.
Monde Bala, Eskom Group Executive for Distribution said: “Residential customers will no longer have to pay a higher price for consumption above 350 kWh and instead will pay the same cent per kilowatt-hour (c/kWh) for all their consumption.
“Additionally, with this NERSA approval, customers that have registered their solar rooftop electricity generation, as required by law, will be able to export own-generated excess energy into the grid. Thus, customers can reduce their electricity bills by benefitting from energy credits from exported energy once they are on a Homeflex tariff. Customers without rooftop electricity generation will no longer subsidise those with own generation as the cost of generation capacity, that recovers the backup costs, is now in a separate charge and is no longer included in the c/kWh price,” Bala continued.
He added further: “The NERSA approval will support improved energy security and reliability by improving price signals in Eskom tariffs supporting economic growth and sustainability in the years ahead. We appreciate NERSA’s approval, which allows us to continue working towards a fairer well-structured tariff system.”
The approved FY2026 tariffs allow for the following changes:
- Residential Homelight tariff customers to pay a single c/kWh rate no matter how many times electricity is bought in a single month.
- Increased transparency and simplicity for Homepower residential customers through the removal of the Inclining Block Tariffs (IBT) structure and unbundling the tariff into separate energy, network, and retail charges.
- Simplified municipal electricity purchasing and management through the consolidation of the previous 10 municipal tariffs into three: Municflex for large power users (LPU), Municrate for small power users (SPU), and Public Lighting.
- The removal of unintended subsidies in service charges. All customer service charges will be raised per point of delivery (POD) rather than per account. This change is intended to ensure fairness and will more accurately reflect the resources required to manage multiple points of supply at large municipal, industrial, and mining connection sites.
- Better alignment of time-of-use tariffs to the National System Operator, industry, mining and commerce needs through changes to the time-of-use ratios, prices, and periods.
- Improved transparency and easier comparisons of electricity generation alternatives from unbundled energy charges by separating energy charges for the renewable energy programme into legacy and fixed generation capacity charges.
- Wheeling customers to contribute fairly to inter-tariff subsidies through the removal of the affordability subsidy credit for wheeled energy.
- Charges related to non-Eskom generators using the Eskom network to transport electricity will no longer be rebated as the new tariffs provide for better charging, reflecting the configuration of the network.
“The approval of the Eskom FY2026 tariffs represents a significant step towards fully unbundled tariffs, introducing separate charges for electricity capacity usage and network services across tariffs that were not unbundled. This approach enhances cost transparency and provides customers with a clearer breakdown of electricity expenses. We maintain the view that the reforms currently under way require appropriate reforms of the regulatory rules and we are working through the NECOM structures to enable this and to enable a competitive environment,” said Dan Marokane, Eskom Group Chief Executive.
The changes and increases are confined to the 12.74% annual average increase approved by NERSA. When the FY2026 tariffs are compared to the current tariffs, the resulting changes in electricity expenses for customers vary across customer tariffs due to the changes in tariff structures. For example, large industry, mining, commercial, and rural customers will experience an overall reduction in fixed charges and winter energy time-of-use prices. Customers can visit www.eskom.co.za/tariffs to make use of the tariff comparison tools.
The approved tariff changes do not apply to customers who are not directly supplied nor connected to the Eskom grid.
Some commentators have highlighted significant drawbacks in the revised tariff structures, particularly for lower use customers and for those who have moved ahead to implement solar PV and battery energy storage systems to supplement their energy usage.
All residential customers on the Eskom Homelight and Homepower tariffs, irrespective of higher or lower levels of usage, will pay a flat rate per kWh. They will also face substantially increased fixed monthly charges.
All round it seems that the impact of the new approved tariffs will be significant.
For more information visit: www.eskom.co.za/
