After years of steep electricity price hikes, many South African households have quietly changed how they power their homes. The combination of tariff increases, structural fixed charges, and flat or falling demand has pushed a growing share of middle-income families toward substitutes such as gas, wood, paraffin, and especially solar. A recent demand analysis argues that Eskom pricing path has moved households beyond a tolerable “energy burden” and into territory where cutting usage or abandoning grid supply becomes rational. Even with political assurances that future tariff hikes will be single-digit, critics say the damage is already done. Below is a clear, policy-neutral rewrite of the key points: how energy burden works, why tariff and fee redesigns matter, what the data suggests for low- and middle-income homes, and what to watch through 2028.
Table of Contents
South Africans Say Goodbye to Eskom? Prices Summary Table
Item |
Details |
|---|---|
Core theme |
Eskom price path and tariff design have pushed many households beyond sustainable “energy burden” levels, depressing grid demand. |
Energy burden rule of thumb |
High if electricity exceeds ~6% of household income; severe above ~10%. |
Household profiles in analysis |
Low-income: ~R5,000/month; ~150 kWh on HomeLight 20A. Middle-income: ~R22,500/month; ~600 kWh on HomePower 4. |
Turning point |
After 2008–2010 price shocks, demand growth stalled, then resumed briefly; recent structural and fixed-charge changes drove new declines. |
2025/26 shift |
Substantial fixed-charge restructuring reportedly lifted the MIH burden ~22%, pushing some into “severe” territory (~10.9%). |
Outlook to 2027/28 |
Phased fixed charges and NERSA-approved hikes imply MIH burden could approach the mid-teens if income growth lags. |
“Demand quicksand” |
Once households adapt curtailing, switching fuels, or adding solar lost grid demand becomes hard to win back. |
Affordability signal |
Calculated “fair maximum” pricing in 2025/26 suggests prevailing rates are far above what maintains a ~2018 burden benchmark. |
Official site |
What “Energy Burden” Means and Why 6% and 10% Matter
“Energy burden” is the share of a household income spent on electricity. Two thresholds help frame affordability:
- High burden: above 6% of income
- Severe burden: above 10% of income
Households that cross 6% often reduce consumption or seek cheaper substitutes. Past 10%, many will restructure usage, adopt solar, or defect more aggressively from grid consumption. That consumer reaction not policy talk drives actual demand outcomes.
Two Household Profiles, Two Diverging Paths
The analysis uses two stylised profiles:
- Low-income household (LIH): ~R5,000/month income; ~150 kWh/month on HomeLight 20A
- Middle-income household (MIH): ~R22,500/month after tax; ~600 kWh/month on HomePower 4
Up to March 2008, LIH carried a slightly higher burden than MIH (by ~10 basis points). But two waves of tariff reform (2008/09 and 2025/26) flipped that relationship. By 2025/26, MIH burden was reportedly 340 basis points higher than LIH. Why? Because fixed charges and tariff structures changed how costs land across usage brackets and customer types, pushing some middle-income users from “high” into “severe” burden territory.
How We Got Here: A Short Timeline
- 2008–2010: Two ~30% price shocks, compounded by the global financial crisis. Demand stalled for ~5 years.
- 2011: A ~10% tariff cut offered brief relief; demand ticked up only marginally.
- 2014–2016: As economic growth returned, demand rose and so did load shedding.
- 2019 onward: Eskom residential demand begins to decline at roughly 5% compounded annually, reflecting price pressure and consumer adaptation (efficiency and fuel switching).
- 2025/26: Fixed-charge restructuring raises MIH burden roughly 22% (8.9% → 10.9%), tipping many into a severe burden. Only ~20% of the fixed-charge change reportedly lands in 2025/26; more phases are due in 2026/27 and 2027/28.
Why Single-Digit Hike Promises May Not Change Outcomes
Officials have signalled that double-digit increases are over, with future hikes nearer to inflation-linked single digits. But Eskom own multi-year price determinations already pointed to that trajectory after the step changes that damaged affordability. In other words, cooling the rate of increase now does little to reverse the demand destruction already embedded. Once households re-optimise downsizing usage, installing solar, or mixing fuels grid demand rarely snaps back to prior levels.
“Demand Quicksand”: Why Lost Load Sticks
The analysis labels Eskom position “demand quicksand”:
- Prices surge relative to incomes.
- Households adapt curtail, shift loads, or self-generate.
- Demand falls and stays lower even if increases moderate later.
- Fixed costs and operational challenges remain, inviting more price pressure which reinforces steps 1–3.
Even the end of rolling blackouts created only a minor demand “spike” in 2025 (<0.1 GW), far below historic peaks. That suggests the demand floor hasn’t yet been found.
Affordability Benchmarks vs. Current Tariffs
Using 2018 as a reference year for an acceptable energy burden, the analysis back-solves “fair maximum price points” for 2025/26:
- HomePower 4 (MIH): Fair maximum ~R2.11/kWh vs. current ~R4.11/kWh → roughly 95% overpriced relative to that burden benchmark.
- HomeLight 20A (LIH): Fair maximum ~R1.57/kWh vs. current ~R2.49/kWh → roughly 58% overpriced.
These are affordability signals, not regulatory determinations; they underscore the gap between what maintains a tolerable energy burden and what many households actually face.
Fixed Charges: Why They Bite So Hard
Shifting more revenue recovery into fixed daily/monthly charges smooths Eskom cash flow but weakens a customer ability to save by cutting usage. For a middle-income user, a larger fixed bill with a smaller variable component means that even radical conservation efforts barely dent the total. That design nudges consumers toward partial grid defection (e.g., solar for daytime loads) to escape the ever-rising fixed portion ironically reducing Eskom sales further.
Practical Implications for Households
If you remain on grid power:
- Audit your load: Identify appliances with the highest kWh draw and shift them to off-peak or eliminate waste.
- Tariff check: Ensure you’re on the correct residential tariff; some municipalities and resellers offer different structures.
- Bill literacy: Separate fixed vs variable lines; that shows where reductions help (or don’t).
If you’re considering solar or hybrids:
- Right-size arrays**: Oversizing raises payback time; match to daytime loads.
- Storage selectively: Batteries improve resilience, but economics hinge on usage profile, outages, and tariff shape.
- Safety and compliance: Use accredited installers; ensure SSEG paperwork and anti-islanding compliance to avoid penalties.
What to Watch Through 2028
- Phasing of fixed charges: Only ~20% reportedly landed in 2025/26; more comes in 2026/27 and 2027/28.
- NERSA rulings: Annual determinations set the ceiling for revenue recovery and shape tariff structure.
- Household income growth: If wages lag tariffs, energy burden worsens even with single-digit hikes.
- Distributed energy adoption: Residential and commercial solar growth rates will signal how sticky demand losses are.
FAQs
1) Why are households cutting grid usage even if hikes turn single-digit?
Because absolute price levels are already high. Once families adapt efficiency, fuel switching, solar lost demand rarely returns.
2) What is “energy burden,” and why is 6%/10% important?
It is the share of income spent on electricity. Above 6% is considered high, above 10% severe thresholds at which consumers start cutting usage or exiting.
3) Why do fixed monthly charges cause such a reaction?
They limit savings from conservation. If more of your bill is fixed, using less power barely reduces the total so households look for bigger structural escapes like solar.
4) Are middle-income users now worse off than low-income ones?
According to the burden analysis, yes: 2025/26 restructuring leaves middle-income users carrying a higher burden than low-income users in some cases, given how the tariffs and fixed fees stack.
5) Could cheaper tariffs revive demand?
In theory, yes but large, sustained price reductions would be needed, and trust must be rebuilt. Once customers invest in alternatives, reversals are slow.
6) What can a household do right now?
Check you are on the right tariff, audit high-use loads, fix leaks (geyser timers, pool pumps), and price targeted solar for daytime loads.
7) Are current tariffs “overpriced”?
Affordability benchmarks suggest a wide gap between burden-consistent price points and prevailing tariffs. They are signals, not official price rulings.
8) Will demand keep falling?
If fixed charges and tariff levels rise faster than incomes, and solar remains attractive, further demand erosion is likely.
9) Is the end of load shedding helping demand?
Only marginally. A small uptick has been observed, but it is far below historic demand levels.
10) Where can I check official updates or lodge supply queries?
Use Eskom official channels and your municipality portals for tariffs, outages, and metering.
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