Starting with the need to register solar PV systems. This is not new and has been around for a couple of years. One of the key reasons to register solar PV systems is to ensure that installations are of a high enough quality that they don’t cause threats to employees working on the power infrastructure.
While we at GoSolr are supportive of the process, we do have questions about the requirements, the cost as well as the process:
- An increasing number of municipalities use a common electronic portal where solar installers can submit applications. This makes tracking easy. With Eskom, applications are submitted via email and it is not uncommon for us to have to resubmit applications as these cannot be located ‘on the system’.
- Eskom also has requirements that differ from those of other municipalities. We look forward to a national standard that sets well-defined criteria on how solar PV systems are installed, instead of having to navigate a myriad of requirements that tend to change over time.
- Lastly, there is the cost. Eskom has come to the party and voided costs for the system to be registered before March 2026. For a system below 50 kW, the fees are R1208.70 in tariff conversion fee, R1861.15 in standard quotation fee, R3250.80 in connection fee and R2812.00 for the new meter, hence a total of R9132.65 ex VAT. As much as we recognise that there is a cost attached to processing an application, we question these numbers as they appear to be inflated. Take the tariff conversion fee: Eskom is forcing users to move onto the homeflex tariff and charging R1208.70 for this exercise. It is unclear what cost Eskom occurs when processing such a request. Anyway and as indicated above, we welcomed the news that Eskom is lifting these costs until next year.
On the tariff increase, this has been widely debated, and it should not come as a surprise that Eskom has increased its prices with a double-digit increase on April 1st (municipalities will push their change in July).
What is perhaps more interesting and less well understood is the new tariff. Solar users are forced to move to a tariff called ‘Homeflex’ which consists of various fixed fees and a variable fee in R/kWh that varies with time, day and season. Residential players considering a solar install will typically be on a pre-paid or post-paid tariff known as ‘Homepower’. The tariff is the same in both cases so there is a priori little difference. The a priori is important as a customer on a pre-paid tariff will need to create a deposit of two to three months in order to move to the required tariff. This is a major blocker for users as the trust of South African residents in Eskom is fairly limited at the moment.
In any case, users are forced to move to the Homeflex tariff. We believe that this should be voluntary. That being said, we would be encouraging our users to select the Homeflex tariff as smart management of the solar PV system and consumption will allow users to reduce their costs further, while avoiding consumption when the overall infrastructure is usually strained. This is a win-win. As such, we are supportive of this tariff. As usual, the details matter: The ‘Homeflex’ tariff opens up for feeding excess power back to the grid and the rates are attractive. When we contacted Eskom to understand what it meant, the feedback was simple: They are not ready to implement it.
Before I conclude, I was eager to share some recent experiences. At GoSolr, together with philanthropies, we launched an initiative where we want to make solar available to under resourced schools. These will often be schools in areas with recurrent power outages and who can really benefit from saving on their electricity bills.
These schools are on a different tariff known as ‘Homelight 60A’. This tariff consisted of a variable fee in R/kWh which is lower for the first 600 kWh than anything above that. With the elimination of the step tariff, the increase per kWh faced by these schools is up to 18.25%.
What makes the situation far worse is that they will need to move to a homeflex tariff as well if they go the solar route. The fixed fees are such that even a donation would result in higher expenses for the school. It is clear that the tariff changes is impacting those that have little significantly more than wealthy customers. This is fairly counterintuitive.
Overall, we are supportive of the compliance process yet openly question whether Eskom has the necessary systems in place to efficiently process them. We are supportive of the new tariff yet wonder why it was released when the most attractive feature of that tariff for solar PV users is not available. We are also concerned that this tariff will make solar inaccessible to a portion of the population, typically those with limited means. The worry overall is that these changes may be pushed not to ensure better install quality and good utilisation of the electricity infrastructure but to protect revenues by weakening how attractive solar solutions are. This is a game where South Africans will lose, as the new tariff increases raise costs for lower-income users in favour of higher-income users.
Note that all of the above applies to customers directly connected to Eskom and not to customers getting their power via their municipality, Estate, or a third-party provider. These will have their own compliance process and tariffs.