Homeowners in South Africa are bracing for electricity bill increases of up to 60% this winter, driven by new Eskom tariffs and higher seasonal rates.

Alumo Energy reports that average consumption rises by 23% in winter, significantly pushing up electricity bills.

Set for July, the municipal tariff increase is a substantial 12.72%, following last year’s 18.65% hike. Alumo Energy’s MD, Rein Henkemans, warned that the combination of winter tariffs, new Eskom tariffs for 2024/2025, and a seasonal spike in energy usage could lead to a substantial surge in electricity bills.

The situation is more alarming due to the traditionally higher winter tariffs imposed by municipalities from June to August, which can reach nearly 20%, he said.

This timing coincides with the annual tariff hike, exacerbating household financial strain.

The National Energy Regulator of South Africa (Nersa) approved a 12.74% electricity tariff hike for the 2024/25 financial year, effective from April 1.

Alumo Energy’s recent case study on household electricity consumption highlights the severity of the issue, showing that average household usage increases by 23% during winter, with some households experiencing up to an 87% rise.

Household energy use naturally increases during the winter as families spend more time indoors, run heaters for long periods, and as geysers work overtime to heat the colder water coming in, the study noted.

This heightened usage, combined with tariff hikes, significantly increases monthly electricity bills.

Henkemans pointed out that this could push households into higher tariff brackets, where each unit of electricity becomes substantially more expensive.

Potential Effects on Households

Alumo Energy presented examples to illustrate the potential impact on household budgets:

Example 1: A household’s consumption rises by 23% from 813 kWh in May to 1,000 kWh in June. With the winter rate increase, their monthly bill jumps from R1,650 to R2,430, an increase of R780.

Following the annual tariff hike in July, the bill climbs to R2,740, representing a total rise of nearly R1,100 or 66.2% from May.

Example 2: A household using 2,700 kWh in the summer sees a 23% increase to 3,321 kWh in winter, pushing them into a higher tariff block. Their bill escalates from R6,220 in May to R9,000 in June, a leap of R2,780.

With the annual tariff increase in July, the bill reaches R10,140, a total increase of more than R3,920 or 63.1% from May.

These figures are fairly conservative, said Henkemans, noting that some households could see their bills more than double during colder months after the new tariffs kick in and demand soars.

On average, a South African household could be spending an additional R480 per month on electricity due to the hikes, translating to an extra R5,760 annually, according to Alumo Energy business director Jean-Phillipe Ghyoot.

This highlights the growing impact of continuous double-digit tariff hikes on household budgets.

Alumo Energy calculated the impact on an average five-member family in Pretoria. Assuming a consumption of 12,000 kWh per year, their bill at City of Tshwane “domestic supply” rates currently totals about R3,800 per month or R45,600 per year for 2023/2024.

If their prices rise by 12.74%, the bill would soar to over R4,300 per month or nearly R51,600 per year, placing even greater strain on budgets.

Just three years ago, the same family would have paid about R3,000 per month or R36,000 per year, and five years ago, their bill would have totalled about R2,500 per month or R30,000 per year.