By MidCity Utilities (Pty) Ltd
Eskom has implemented restructured residential electricity tariffs and new standard electricity tariff rates, effective from 1 April, resulting in an average electricity price increase of 12.74% for the 2025/26 financial year, and tariffs for municipal bulk purchases will increase by 11.32%, effective on 1 July 2025.
However, the impact of this increase will differ amongst Residential customers. Some consumers may experience higher increases, while others may see lower increases or even reductions in their monthly electricity costs.
Eskom’s residential tariffs are categorised into three main groups:
| Group 1 | Homelight Tariffs | – 20A: This is designed for low-income customers with a limited capacity of 20A, utilising a prepayment meter. – 60A: Also aimed at low-income customers, this option supports a capacity of 60A and can be used with either a prepayment or postpaid meters. Inclined Block Tariffs have been eliminated and replaced with a flat rate for energy consumption. |
| Group 2 | Homepower Tariffs | – Targeted at middle- and higher-income customers, this group includes five options (1, 2, 3, 4, and Bulk) based on the number of phases and supply capacity. – The Homepower 4 tariff, which features an 80 A, 1-phase, 230V AC supply, is particularly noteworthy as it represents many Homepower Residential customers and is implemented with either a credit meter or a smart meter. Inclined block tariffs have also been removed, with a flat rate applied for consumption. |
| Group 3 | Homeflex Tariffs | – These time-of-use (TOU) tariffs are also aimed at middle- and higher-income customers who can adjust their energy consumption based on pricing signals, allowing them to take advantage of lower rates during off-peak periods. |
This restructuring aims to better align electricity pricing with consumption patterns and customer needs.
The recent Residential tariff changes approved by National Energy Regulator of South Africa (NERSA), have significant implications for the monthly electricity expenses of residential customers.
These adjustments, along with the increase in tariff rates for the 2025/26 financial year, are primarily driven by substantial increases in residential electricity tariffs and a restructuring of the tariff framework.
This restructuring aims to modify the previous cross-subsidies that existed between larger and smaller customers, as well as between rural and urban customers, and between lower and higher income customers.
The removal of inclined block tariffs for some groups may result in lower bills for customers with high consumption and higher bills for those with lower consumption.
The Homeflex 4 tariff, designed for middle- and higher-income customers, encourages users to respond to time-of-use pricing signals, by shifting their energy consumption to standard and off-peak periods.
While this tariff will see significant increases in time-of-use energy rates, it provides incentives for high usage customers to save on their electricity bills through load shifting.
However, low usage customers, who often lack the necessary appliances to effectively shift their energy usage, are unable to take advantage of these savings and some argue that this can potentially lead to increased costs.
“The NERSA approval enables Eskom to implement simpler tariffs for low-consumption households and municipal bulk purchases. The new tariffs will ensure that customers pay for costs they incur, thereby reinforcing a stronger user-pays principle in electricity pricing through the removal of unintended subsidies”, as per Eskom Article published on the 19th of March 2025.
Sources:
Eskom Article 19th of March 2025: https://www.eskom.co.za/eskom-to-implement-nersa-approved-financial-year-2026-tariffs-removing-unintended-subsidies-and-introducing-simplified-and-transparent-tariffs-effective-1-april-2025/#:~:text=The%20NERSA%20approval%20enables%20Eskom,the%20removal%20of%20unintended%20subsidies
https://www.eskom.co.za/distribution/2025-2026-price-increase/
