By Bronwyn Timm, Business Development Manager, SOLA Group
The Eskom tariff increase is reshaping how the industrial and commercial sectors view their dependence. Although the 8.76% increase is substantial and comes at a time of relatively weak growth and tight margins, it presents an opportunity for companies to rethink their energy strategies.
Energy economists and industry analysts have warned that the hikes will raise operating costs, with manufacturers likely to pass them on to final prices amid the added burden of fuel inflation. The conflict in the Middle East has also affected South Africa’s GDP growth, which was downgraded to 1.5% in March from 1.6% in February. Yet this growth dip isn’t as severe as expected, and South Africa's growth is proving resilient compared with the 1.0% predicted by the International Monetary Fund (IMF).
Yet within this complexity, there is typical South African resilience and smarter ways for companies to approach the energy dependency story. Tariffs can be addressed through demand management, intelligent metering and billing accuracy, and potentially by reducing reliance on a single electricity source at a time when companies are facing structurally rising costs and a changing pricing architecture.
First on the win list is battery storage. Battery costs are falling, and large-scale private battery and solar combinations, such as SOLA Group’s Naos-1 project, which comprises 435MWp of solar PV capacity and 855MWh of battery energy storage, are financially viable today in ways they were not 18 months ago. The financial case improves materially every six months. South Africa is entering this battery storage and renewable energy integration phase at an unusual advantage because more developed markets that deployed renewables 20 years ago without affordable battery storage are now grappling with ongoing grid instability. South African companies can deploy both renewables and BESS simultaneously at a lower price point.
Second, the value introduced by wheeling contracts. They have become more flexible, with products available on terms of two to five years at smaller volumes, as opposed to the 20-year terms of the past. This is opening access to companies that couldn’t commit to long-term agreements.
Then, the arrival of the South African Wholesale Electricity Market (SAWEM), expected in late 2026, is expected to add another layer of support to the business. Companies that engage now, while building internal capability to operate in a commodity trading environment, will be well positioned to benefit from this new competitive landscape.
While the Eskom tariff increase is real and its impact is broader than the percentage suggests, it is also opening a conversation that can have a long-term, transformative impact on the business. It can be the trigger needed to change energy provision and reliance at a structural level, thereby putting companies in a materially stronger position.
These steps don’t change the fact that there will be financial consequences for now, but they will empower companies to take greater control over their energy reliance and how they manage it. The current market is affecting organisations globally, but South Africa has the resilience, ingenuity, and infrastructure to make the most of this complexity.
Ultimately, the shift from energy dependence to energy resilience is becoming a defining factor in competitiveness across South Africa’s industrial and commercial sectors. Businesses that proactively invest in diversified energy strategies, leverage emerging competitive market mechanisms, and build internal capability will not only mitigate rising costs but also secure long-term stability and growth. It’s all about resilience, and the South African organisation has had plenty of practice.