We’ve got some bad news for all you solar PV system owners in South Africa. The National Energy Regulator of South Africa (Nersa) has approved Eskom’s Retail Tariff Plan (RTP) that will effectively require residents – those who are still connected to the grid – to pay Eskom every month, whether they use electricity or not.
Sometimes maybe good, sometimes…
It’s not all bad news, however. Eskom’s proposed implementation for higher tariffs has been dramatically adjusted by Nersa, allowing the increased fixed charges to be spread out over the coming years. The recent revenue determination allowed Eskom a 12.74% hike, affecting the financial year. The proposed 5.36% and 6.19% increases for the following two years are “still valid,” according to Moneyweb.
Deon Conradie, former senior manager for tariffs at Eskom said: “Nersa approved the alignment of tariffs with an updated cost-of-supply [study] to accurately reflect the cost of these services to avoid volume and trading risk; to reflect cost drivers more accurately; and to ensure that tariff charges cater for the unbundling of Eskom.”
This restructuring, Nersa assures, is not designed to make Eskom’s back pocket bigger than it was a year ago, confirming that Eskom “won’t be allowed to recover more from tariffs.”
While Nersa’s changes are getting a lot of attention in regards to residents with solar PV installations, Conradie warns that nearly every resident connected to the grid is bound to experience a change. This might prove to be a boon to your monthly payments or could result in larger payments, depending on your energy usage. Even small changes to your regular electricity consumption could lead to big changes in your bill, he added.
“The unbundling of the generation cost into fixed and variable charges will align the way Eskom’s clients pay with the way independent power producers (IPPs) charge for electricity, thereby preparing Eskom for a competitive wholesale market, as foreseen in the recently promulgated Electricity Regulation Amendment Act,” said Moneyweb.
This leads to a reduction in the variable time-of-use (ToU) c/kWh energy charge, as well as the implementation of Eskom’s GCC (generation capacity charge) plan, which will be phased in over the next three years – though at a lower rate than Eskom had hoped. It’s here where solar PV homeowners, particularly those with a low kW/h average throughout a month will be expected to pay for simply being connected to Eskom’s network.
This is to negate non-solar residents effectively subsidising solar PV users, through the current cost system.
“This eliminates artificial subsidies and improves cost transparency, particularly for grid-connected backup and energy export users,” says Conradie. “It ensures they contribute fairly to network costs.”
Also approved was the reduction of service and administration charges for large power users residentially – though these service charges will now be applied to each home’s point of delivery (PoD) rather than a singular account, which would incur additional costs for homes with multiple PoDs.
Further changes were approved by Nersa to Eskom’s ToU tariffs. The morning ‘peak’ has been bumped down to two hours rather than the usual three – a good thing, for many – while the evening ‘peak’ has been extended from one hour to three. Residents who use more electricity during the evening will feel the sting of a larger bill.
