A common question we hear is, “How much does electricity cost per kWh in South Africa? So we thought we would take a look into this topic and not just provide you with the answer but also take a look at a few closely related topics. We’ve also included some interesting data about the historical electricity cost per kWh.
The 2020 average electricity cost per kWh in South Africa is 110.93 (c/kWh). However, it is essential to note that this is an average cost and not what a typical residential user would expect to pay. As the cost of electricity increases, the more you consume, so the average cost will vary greatly from user to user. Additionally, the cost of electricity varies depending on the user type. For example, Residential Tariffs start at 145.55 (167.38 incl VAT) and go as high as 234.06 (269.17 incl VAT). Whereas High Load Factor Urban Customer Tariffs start at 69.64 (80.09 incl VAT) and go up to 280.92 (323.06 incl VAT). The Tariffs also vary according to high and low demand seasons. Business consumers in some areas pay a winter tariff which is higher than the summer tariff. The winter tariff typically coincides with the annual price increase, which occurs in July for Municipalities or, in April for Eskom billed consumers.
Although the above prices are published by Eskom, these are not the most common rates billed in our experience.
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City of Johannesburg: on average, the most commonly billed residential rate per kWh is between R1.83 and R2.38 which includes fixed fees of approx. R670 per month incl VAT. (Although the rate per kWh is more expensive on prepaid, there are currently no fixed fees, which could make prepaid electricity cheaper, depending on consumption.) Business rates are around 25% more expensive than residential rates, and fixed fees can be astronomical if you incur a demand site management levy for business. Here is a link to their current pricing structure https://www.citypower.co.za/customers/Documents/Schedule%20of%20Approved%20Tariffs%20202021.pdf
City of Ekurhuleni: on average, the most commonly billed residential rate per kWh is R2.34 (Tariff B) incl VAT, which does not include fixed fees of R50.39 per month incl VAT. Tariff A (a stepped rate) is cheaper if you consistently use below 750 units per month (the rate becomes R7.59 incl VAT over 700 units per month). Business rates are around 25% more expensive than residential rates. Here is a link to their current pricing structure (starts on page 4) https://www.ekurhuleni.gov.za/residents/tariffs/tariffs-2020-21/4653-schedule-2-of-electricity-tariffs-2020-21-1/file.html
City of Tshwane: on average, the most commonly billed residential rate per kWh is between R2.30 and R2.45 which includes fixed fees.
How much kW is required for a house in South Africa?
We spent some time trying to find an answer to this question. One website suggested that according to Eskom the average usage was above 30 kWh per month. Another website suggested in the region of 900 kWh per month. This varies according to the number of people in the household and the number of large consuming appliances in use.
While there does not seem to be any reliable data regarding the average monthly residential electricity usage, what is known is, you will pay lower tariffs when your usage is under 600 kWh. Once your consumption exceeds this, you will start to pay more per kWh.
Ultimately, what is important is to determine your average cost. We will explain how you can do this in the next section.
How do I calculate cost per kWh?
If you want to determine what your average electricity cost per kWh is then this is a relatively simple process. All you need to do is take the total electricity cost from your monthly bill, then divide by the total number of kWhs you were billed for.
You can work out the cost with or without VAT by choosing the cost with or without VAT and then dividing it. To make things even simpler, we’ve provided a simple electricity calculator which will give you a cost per kWh. This calculator works for monthly bills or prepaid slips. All you need is the amount you were billed in Rands and the number of units charged for.
It is a very useful exercise to determine how much you are actually paying for electricity, especially if you take the time to do the calculations for a full year. This way you will also see the differences between low demand and peak demand periods.
When did Eskom increase the price of electricity?
Eskom increases the price of electricity every year. In fact, some years they have increased their tariffs more than once.
Average electricity cost per kWh has increased by more than 4 times from 2008 to 2020. Even when taking inflation into account it is 2.5 times as much.
Eskom has been granted 2 additional increases by NERSA which will take the average electricity tariff to 128.24 c/kWh in 2021. This is an annual increase of around 15% which is far above inflation.
The below table displays the average electricity cost per kWh for the past 26 years.
|Eskom electricity tariffs 1994-2020|
|Year||Average (c/kWh)||Average price increase||Inflation||Inflation-adjusted price (c/kWh)|
The above data is compiled from Eskom’s historical pricing data as well as their Tariff and Charges booklet. To view all Eskom’s Tariffs you can download Eskom’s Tariffs & Charges Booklet. Table originally found on MyBroadBand
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What is your electricity rate? Tell us below, include your area, whether the rate includes VAT and fixed fees. Also tell us if you are business or residential.
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Image Credit: CSIR