In January 2025, NERSA approved Eskom's latest Multi-Year Price Determination (MYPD) application, granting an average tariff increase of approximately 12.7% effective 1 April 2025. While this is marginally below what Eskom applied for, it continues a trajectory that has seen South African electricity prices increase by over 600% since 2007 in nominal terms — and more than 200% in real (inflation-adjusted) terms.
The Numbers in Context
| Year | Avg Eskom Increase | CPI Inflation | Real Tariff Change |
|---|---|---|---|
| 2020/21 | 15.6% | 3.3% | +11.9% |
| 2021/22 | 15.0% | 4.5% | +10.0% |
| 2022/23 | 18.65% | 6.9% | +10.9% |
| 2023/24 | 12.74% | 5.4% | +7.0% |
| 2024/25 | 13.5% | 4.8% | +8.3% |
| 2025/26 | 12.7% | ~4.5% | +7.9% (est.) |
For a large C&I customer spending R500,000 per month on electricity, the April 2025 increase alone adds approximately R63,500 to the monthly bill — R762,000 per annum — with no change in consumption or operations.
Sector-by-Sector Impact
Manufacturing & Cold Storage
These operations typically run high base loads with significant demand charges on Miniflex or Megaflex tariffs. The peak demand component of the tariff increase is disproportionately high — often 15–20% in real terms — compounding the impact on businesses where demand charges represent 25–35% of the total bill.
Agriculture & Agro-Processing
Farming operations, packhouses, and cold chains are particularly exposed. Many are on Landrate or Ruraflex tariffs, which have historically increased at or above the Megaflex rate. For irrigation-intensive operations, the combination of tariff increases and water scarcity creates a compounding cost risk.
Retail & Property
Shopping centres and commercial property portfolios face the dual pressure of rising common area electricity costs and tenant requests for green energy credentials. Landlords who have not yet installed rooftop solar are increasingly uncompetitive in lease negotiations with sustainability-conscious tenants.
The Solar Payback Calculation Has Changed Fundamentally
Five years ago, a rooftop solar system at R10/Wp had a simple payback of 7–9 years on a cash purchase basis. Today, with installed system costs closer to R8–9/Wp for quality equipment, but electricity tariffs 60–70% higher, payback periods on cash purchases have compressed to 4–5 years for most C&I applications.
On a zero-capex RTO or PPA basis, day-one savings are now the norm for most operations above 200kWp. The tariff trajectory means these savings compound annually — a PPA with 5% annual escalation against Eskom's 12%+ annual increases widens the saving every single year.
What to Do Now
The practical implication of another above-inflation tariff increase is straightforward: the longer you wait, the higher your base tariff at contract signing — which compresses the savings differential in year one, even though the long-term case gets stronger. Businesses that signed PPAs three years ago at 30% below the then-tariff are now, in many cases, paying 50% below the current tariff.
If you haven't yet received a solar proposal, the April 2025 tariff increase is the clearest possible signal to get one before the next review cycle. SOCO ENERGY provides fully modelled proposals — including 20-year cashflow projections with tariff escalation scenarios — within 48–72 hours of site visit.