In the NERSA and Eskom press releases, the 2025/26 tariff increase is framed as a fairly tame 12.74% hike - at least by their historic standards. But that average conceals a fundamental shift in how electricity is priced. This isn’t a simple annual adjustment. It’s about structure. And tariff structure - together with local grid reliability - will increasingly determine who stays, who pays, and who walks away.
The core change is this: Eskom has moved from a mostly usage-based billing model to one where fixed charges predominate. Network fees, capacity charges, daily service charges - they are all up. At the same time, per-unit electricity costs have come down, especially for high-consumption users. The old Inclining Block Tariffs (IBT), which punished excess and rewarded frugality, are gone.
Eskom argues this is about sustainability. Its costs are mostly fixed, and under the old model, those costs were only recovered when people used electricity. But as customers reduced usage or added solar - something Eskom itself has encouraged since load shedding began 17 years ago - revenue collapsed faster than costs. The new tariff structure is designed to fix that, aligning billing with actual system costs.
But while the logic works on a spreadsheet, the experience of customers is another matter.
Low-usage customers - retirees on fixed incomes, energy-conscious homes, solar-equipped units - are suddenly paying 20%, 30%, even 40% more. According to mybroadband one Eskom Direct household using just 180 kWh saw their bill jump from R628 to R883. That is not a 12% increase. That is a signal: efficiency no longer pays.
Meanwhile, high-usage households benefit. With flat rates and no penalty tiers, the more you use, the less you pay per kWh. And the more units you consume, the smaller the fixed charge feels.
It’s a structural shift with real-world consequences. And for those already halfway to energy independence - retirement villages with solar rooftops, commercial clients with batteries, seasonal agribusinesses with CHP potential - it may be the final nudge off the grid.
If your electricity bill rises by 30% - not because of more usage, but because fixed charges doubled - it doesn’t take much analysis to reconsider your grid connection. A modest additional investment in battery storage, a second backup inverter, or gas water and space heating could offset what you're now paying just to stay plugged in. And if you have had to buy a generator for emergency backup anyway then you might as well occasionally use it, saving you from the effects of an unreliable grid.
Yes, the fixed-cost recovery model makes sense in aggregate. But individual utility customers are never average. And for some of those types, especially in Decentral’s world, the new tariff design is just not suitable.
Tariff arbitrage opportunities are also starting to emerge. With careful analysis of load profiles and tariff structures, some clients may benefit significantly from shifting their approach. For example, a retirement village currently on a residential tariff might reduce its exposure to fixed charges by consolidating supply behind a bulk meter and switching to a Time-of-Use (TOU) tariff, while managing internal distribution with its own prepaid meters. Similarly, a backup battery system - originally installed for load-shedding - could be repurposed to manage peak demand or perform load shifting, lowering both energy costs and fixed capacity charges. In this environment, strategic design and billing alignment can be just as valuable as generation assets.
At Decentral, we serve community schemes, residential estates, retirement villages, and larger commercial, industrial, and agricultural customers. These are not early adopters. They’re disciplined operators with budget constraints and long-term planning cycles. But they are also rational - and the 2025 tariff structure has tipped the equation.
Clients who were exploring self-generation in 2024 are now asking if they can ditch the grid entirely. And some of them can. The economics just got more persuasive - especially when compared to a grid that’s becoming less reliable, more constrained, and more expensive by the month.
For many, the impact is not just economic - it’s emotional. Picture a farmer’s field, crops wilting as the centre pivot irrigation system stands idly by. A fruit packhouse, silent in the heat, with crates of perishable produce waiting for power that doesn't return. A bookkeeper opens an estimated bill for a full month—despite half of it spent in blackouts. These are not rare moments. They are routine. And they fuel the sense that no matter how much you pay, the grid might not be there when you need it.
For years, large industrial and commercial users have cross-subsidised rural electricity supply - especially to farms on low-density, high-maintenance networks. Eskom’s new structure strips away much of that subsidy. As a result, farmers now face steep increases, even as their grid service remains patchy, with frequent voltage drops and outages. In some cases, the only consistent part of the experience is the bill.
It is this combination - higher cost, lower quality – which makes the move to partial or full independence rational.
In municipal distribution areas, the situation is even more opaque. Each municipality must interpret Eskom’s restructuring and apply it to its own tariff book. Some have gone as far as imposing fixed electricity charges on all serviced properties, even those with no active connection. In an era moving toward cost-reflectivity, that is hard to defend.
But the bigger point is this: electricity pricing in South Africa is no longer national. It’s local. It’s political. It is inconsistent. Every customer must now analyse their own municipality’s policies before making infrastructure decisions. And every new layer of complexity pushes more energy users toward self-reliance.
Eskom’s tariff restructuring may have made its finances more predictable. But it has also made off-grid and hybrid energy models more attractive to more people, in more places, more quickly than anyone anticipated.
And that’s the part nobody averaged in.
