In a decisive move that is poised to impact millions of South Africans, the National Energy Regulator of South Africa (Nersa) has officially approved the Eskom Retail Tariffs and Structural Adjustment (ERTSA) for 2025.
The approval, announced in a statement on Monday, confirms that electricity prices for direct Eskom customers will rise by 12.74% starting from 1 April 2025.
Municipal customers, too, will feel the financial pinch, with prices set to increase by at least 11.32% from 1 July 2025. This staggered roll-out of tariff hikes reflects the differing financial years of Eskom and the municipalities. While Eskom operates on a fiscal year from April to March, municipal financial periods run from July to June.
The regulator noted, ‘The difference in percentage is due to the different implementation dates of Eskom direct customers and municipalities buying from Eskom.’
This structured adjustment not only reflects a need for Eskom to recover full allowed revenue within its financial year, but it also highlights the complexities involved in managing public utility pricing amidst ongoing financial challenges faced by the electricity sector.
Municipalities will be tasked with determining their budgets in reaction to these increases, and their final rates may vary further based on local assessments and additional charges municipalities might impose. As such, the impact on consumers will depend on various local factors and how municipalities choose to adapt to the newly approved rates.
The approved increases are part of a broader multi-year price determination (MYPD6) scheme, which Nersa has established to allow Eskom to navigate its financial landscape more effectively.
Under this framework, total price hikes are expected to incrementally rise to:
- 12.74% in 2025
- 5.36% in 2026
- 6.19% in 2027
Reacting to the announcement, the co-founder of Glint, a solar platform, Franc Gray, stated that Eskom is moving away from a primarily consumption-based model to a more structured split that balances fixed and variable costs.
‘Historically, grid users paid a small connection fee while the bulk of their costs came from unit consumption. However, as solar adoption increases, Eskom’s infrastructure must still be maintained despite reduced individual reliance on the grid. This necessity has driven several key changes,’ Gray said.
He explains that the new structure introduces higher fixed charges, which are inversely proportional to grid usage. ‘Consumers drawing fewer units from the grid, such as solar users, will see higher connection fees, ensuring that all grid-connected customers contribute to infrastructure maintenance.’
‘In addition, Eskom is restructuring unit pricing based on peak and off-peak hours to better reflect the actual cost of electricity supply. Users who can shift their electricity consumption outside peak periods stand to benefit. Solar users, in particular, can leverage battery storage or grid access selectively to optimise costs,’ says Gray.
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