By Mark Allewell

You’d be hard pressed to find a nation whose modern character is as entwined with electricity as South Africa. Since the late 2000s, loadshedding has made power generation, grid stability, and electricity costs unwelcome yet constant visitors in our homes, conversations, and daily lives. Eskom’s temperamental service has made South Africans not only cautious, but adaptable and ready to respond to new challenges.

As of this time in writing, South Africa has experienced a welcome absence of systemic power cuts. But this doesn’t mean we’ve become complacent - history has made us hyper-aware of Eskom’s every move, always ready to react at the slightest deviation. And the pattern is about to deviate again, albeit subtly, with changes to Eskom’s tariff structures for the 2025/2026 financial year.

Introducing the Homeflex time-of-use tariff system

In 2023/2024, Eskom introduced Homeflex, a time-of-use tariff system for homeowners. In simple terms, Homeflex seeks to encourage residents to reduce electricity consumption during high-demand times – those peak hours, like the early morning rush before work and the evening when everyone returns home. By making electricity more expensive during these hours, Eskom hopes people will make small, conscious changes to reduce their consumption. Crucially, Eskom has also acknowledged the role private power generation plays in reducing grid strain - encouraging solar-powered homes to charge their batteries during off-peak hours to avoid drawing from an already strained grid during peak hours.

It is important to note that the time-of-use system can only be rolled out across South Africa once smart meters are widely installed. This deployment remains a gradual process. While installation efforts are underway, it will take at least three to five years before a significant portion of the grid is equipped enough to support time-of-use tariffs at scale. Until then, the transition will be limited, as the necessary infrastructure and technological readiness must first catch up to ensure seamless implementation.

On top of the time-of-use Homeflex system incoming, Eskom is further tweaking their approach. From April 1, the troubled parastatal plans to simultaneously split electricity costs into its constituent components and increase peak-hour prices.

The goal is to make sure that homes without private generation aren’t charged the same as those with solar panels (that may draw power from the grid to recharge their batteries at night during peak hours). On the surface, this approach seems like a reasonable, well-intentioned effort to reduce pressure on the grid. But when it comes to Eskom, even straightforward ideas often don’t translate easily into execution.

If Eskom supplied power directly to every home, this tariff change would be simple from a bureaucratic standpoint. However, not everyone buys power directly from Eskom - Cape Town, for instance, first buys power from Eskom before selling it to citizens at a premium (needed to fund the municipality’s upkeep of the transmission system). This means that time-of-use schedules like Homeflex aren’t implemented in some places (although other measures are in place to offset the difference). At present, it remains uncertain how the pricing changes will affect customers who buy power indirectly. Eskom has indicated the potential for an eye-watering 36% price hike for some, putting significant strain on households without the benefit of buying directly from Eskom and avoiding some of the excess charges aimed at those with private generation.

No flying cars (just yet)

Modern homes are not what the futurists of the 1950s predicted – there’s no shiny, chrome-filled decor or wall-to-wall automation. Instead, we’ve downsized appliances, with only a handful of specialty gadgets becoming household staples. Interestingly, despite the appearance of high-tech homes, the bulk of residential electricity use still centers on one key factor: temperature control. Fridges, pool pumps, air conditioners, kettles, geysers, and space heaters are big electricity guzzlers. Even old-fashioned incandescent light bulbs – inefficient as they were – generated heat simply from raising the temperature of their filament.

Let’s take the geyser as an example: a hot water heater is one of the most electricity-thirsty appliances in the home. A geyser can be responsible for 40-60% of household power usage. How? It takes a 3kW, 150l geyser element 2 hours and 40 minutes to heat the water from 20ºC to 65ºC. In this time, the geyser consumes around 8kWh. Continuously heating water and keeping it at the right temperature is an energy-intensive, slow process.

This becomes even more challenging when water usage is unpredictable – many people leave their geysers running for hours to accommodate their daily routines. But heating a geyser all day is like permanently boiling a kettle to enjoy one small cup of coffee in the morning, it’s not economical or energy-saving at all. Under Homeflex, the punishment isn’t for using hot water during peak hours, but for the energy required to refill and constantly reheat the geyser. Since one inevitably leads to the other, morning and evening showers could become a costly exercise in economic decision-making.

All of this sets up a frustrating set of circumstances for many. Eskom’s attempt to modernise and improve the power system through a time-of-use tariff system is a step in the right direction, but execution is clouded by the complexities of South Africa’s decentralized electricity distribution channels and the steep price hikes that often follow. Fortunately, South Africans have some advantages to help weather the storm.

We aren’t the first, and won’t be the last

It’s important to note that South Africa isn’t the first country to go through this process. Australia, New Zealand, Canada, the USA, Hong Kong, and several European nations have all faced similar challenges, and we can learn from their experiences. What’s more, the lessons from these countries have been extensively studied and discussed by academics, think tanks, and the government and private institutions. There’s even a dedicated journal, Energy Regulation Quarterly, focused on these issues, with a wealth of advice for both consumers and Eskom on how to adapt to time-of-use tariffs.

For consumers, the key recommendation is simple: make use of enabling technologies such as digital thermostats, timers, temperature controllers, and eco-friendly appliances. South Africa has a range of options in this space, and investing in these technologies can help mitigate the impact of high-demand tariffs. In the case of geysers, for example, you can ensure that your geyser is pre-heated during off-peak hours, avoiding the need for it to reheat during peak times. By using smart, low-cost technologies, South Africans can not only soften the blow of peak-hour price hikes but also streamline their energy use, lower costs, and support Eskom’s efforts to promote more responsible and sustainable electricity consumption.

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Eskom's new homeflex tariff: what South African households need to know