The price of water and electricity in South Africa: A Tale of Two Tragedies

Authors: Matthew Capes, Sean Moolman

This article seeks to examine the price and affordability of water and electricity in South Africa. We embark on a tough but important journey to shed light on how the price of electricity and water has changed over the last 25 years, and how these basic needs have become less affordable for us, the citizens of South Africa.

On this journey, we discuss the following topics in 5 short chapters (click the link to go directly to a specific chapter):

  1. The increase in Eskom’s average electricity tariff vs. inflation (CPI) – click here to read
  2. The increase in the average municipal water and sanitation tariff for three different income levels vs. inflation (CPI) – click here to read
  3. The contrast between the increases in South African electricity and water tariffs vs. inflation (CPI) – click here to read
  4. How South Africans’ monthly electricity and water bills have changed in the past 25 years in both nominal and current money – click here to read
  5. The combined electricity and water bill of an average South African household vs. average household disposable income in South Africa – click here to read

Each of the above topics is accompanied by a graph to aid the discussion and illustrate the seriousness of the situation in South Africa.

We hope to highlight the pertinence of wise water usage and efficient energy consumption and to stimulate the conversation surrounding what we could and should do to ensure sustainable and affordable access to these basic needs for all South African citizens.

For methods, assumptions and references, click here.

Chapter 1. Eskom average tariff vs. inflation (CPI)

The state of South Africa’s electricity provider, Eskom, is no secret. Plagued by ageing infrastructure, mismanagement, corruption, shrinking or stagnant revenues and increasing debt, the state-owned utility is caught in what is known as a ‘death spiral’.

The impact of these issues manifests in two ways. The first is known as load-shedding, something with which we as South Africans have become all too familiar. The second is the infamous Eskom electricity tariff increases. Ideally these tariff increases would be somewhat in line with increases in inflation… Oh what a perfect world that would be!

In sunny South Africa, electricity tariffs have increased by 512% from 2007 to 2020 (see the graph). That is 5 times faster than inflation! Eishkom?

To top it all off, Eskom was recently granted a R13 billion clawback by NERSA, as well as an additional R69 billion clawback, resulting from a court judgement in Eskom’s favour[a].

What does that mean for us? We, the citizens of South Africa, are set to experience further rapid electricity bill escalations over the next few years. It goes without saying that those increases will not be accompanied by improved service delivery.

Speaking of rapid escalations, has anyone kept an eye on their water bill? In the next chapter we take a closer look at municipal water tariffs.

Chapter 2. Average municipal water & sanitation tariff vs. inflation (CPI)

In the previous chapter we discussed the 512% increase in the average Eskom electricity tariff since 2007. We shall now embark on the 2nd leg of our journey in which we highlight an equally odious development in a tariff that has received a lot less negative press: Water and sanitation.

You are not alone if you allowed the increasing cost of your most basic need to go unnoticed…

Perhaps now is the time to explore the real water tariff trends, overshadowed by Eskom’s conspicuous plight and camouflaged by a complicated tariff structure, but which impacts our daily lives as South African citizens. Think back to ‘Day Zero’ in 2018 and the questions surrounding a lack of access to water and water insecurity in South Africa.

Now ask yourself this: Is it possible that the cost of the water provided by municipalities has increased faster than inflation, considering the deteriorating service delivery on a broader scale?

As can be seen in the graph, average municipal water tariffs have increased four times faster than inflation since 1996.

Essentially, the average municipal water tariff was almost 1300% higher in 2020 than in 1996… Unfortunately, we must bear this burden together with that of Eskom’s runaway tariffs.

In the next chapter, we compare electricity and water & sanitation tariffs over the past 25 years and consider why the increases in average municipal water tariffs have gone largely unnoticed.

Chapter 3. South African electricity and water tariffs vs. inflation (CPI)

In the previous chapter, we highlighted the dizzying increases in average municipal water tariffs since 1996.  The numbers are startling to say the least, which begs us to ask: how could such exorbitant increases happen right under our noses without a public outcry?

The bulk of negative public attention and sentiment has been aimed at Eskom… Rightfully so, however, it may have distracted us from an equally pressing issue.

Water tariffs (1270%) have increased even faster than electricity tariffs (1120%) over the past 25 years (1996 to 2020).

But we have an excuse for our ignorance, for these staggering municipal water tariff increases are cloaked by more than Eskom’s shadow.

To begin with, our water tariffs appear as only one component in a larger municipal bill and are thus hidden in the details. Furthermore, every municipality sets its own water tariffs and structures them in a more complicated way than residential electricity tariffs. This tariff structure is known as block tariffs, where the price per unit of water increases in blocks as usage increases.

Consequently, it is more difficult for people to make direct comparisons and to know the real cost of each unit of water.

Our journey to unearth the truth would be incomplete without investigating the real monetary impact of these increases. How has the price of water and electricity changed over the past 25 years in current money terms? In the next chapter, we illustrate and discuss how these increases have affected our monthly electricity and water bills in both nominal and current money.

Chapter 4. South African monthly electricity and water bills 1996 to 2021 (nominal and current money)

Electricity and water tariff trends in South Africa were explored in the previous articles in this series. But this would be rather meaningless without highlighting how this translates into the monthly electricity and water bills of the average South African.

What was the monthly water and electricity bill 25 years ago compared to what we are paying today?

Not accounting for inflation, the average monthly electricity and water bill for lower to middle income families was a mere total of R161 in 1996. Fast forward to 2020 and this average monthly electricity and water bill has ballooned to R2 028!

The question you should now be asking is: “how much of that increase was due to inflation”?

As I am sure you would have guessed, the answer is not much. The next graph tells the story.

Essentially, this graph tells us that in 1996 the average electricity and water bill was R638 in today’s money.  A stark contrast to the R2 028 average monthly electricity and water bill in 2020.

These prices have been adjusted for inflation and so the increases seen in the above graph are entirely the result of above-inflation tariff increases implemented by Eskom and local municipalities.

An over-arching question remains:  Can we afford these exponential increases in the cost of two of our most basic needs?

We will answer this important question in the final leg of our journey, in which we compare the average electricity and water bills to the average household disposable income in South Africa over the past 25 years.

Chapter 5. Electricity & water bill vs average household disposable income in South Africa

The final leg of our journey is arguably the most pertinent. We know for certain that inflation is not the major cause of the increases in electricity and water tariffs. But the real question is: Can we afford these spiralling electricity and water bills? Did South Africans’ average income keep pace?

Looking at the above graph, the conclusion must be a deafening no. While our average monthly electricity and water bills have increased by 200% since 1996, our average household disposable income[b] has increased by a mere 37% since 1996.

The divergence between these basic costs and household income is especially pronounced from 2008 onward (the past 12 years). Furthermore, our disposable income has been impacted by economic downturns and, more recently, rising income tax rates.

Two of our basic needs have become increasingly unaffordable and we continue to struggle with load-shedding. Now more than ever, we need to take practical steps to explore alternative solutions.

Although the current outlook is bleak, there is hope on the horizon. In October 2020, the Department of Mineral Resources and Energy gazetted amendments to the electricity regulations, allowing municipalities to generate and procure their own electricity. South Africa has some of the best solar PV and wind resources in the world and the cost of these options continues to fall, making self-generation as well as the renewable aspirations of the Integrated Resource Plan (IRP) more viable every day.

Appendix A. Methods & assumptions

  • Average electricity consumption data for different LSM (Living Standards Measure) categories was obtained from Reference [1]. LSM 1 to 4 were classified as low income, LSM 5-6 were classified as lower to middle income and LSM 7-10 were classified as middle to upper income.
  • Average water consumption data for low, middle & high income households was obtained from References [2] and [3]. It was assumed that water consumption remained constant over time, although it is possible that it has reduced somewhat over the years due to increasing prices and water restrictions. However, the data in the references used ranged from 2004 to 2015 and water consumption was relatively constant over this period.
  • Eskom electricity tariff data were obtained from its website [4].
  • The Consumer Price Index (CPI) was used as inflation measure. CPI data was obtained from References [5][6] and [7].
  • Municipal electricity and water & sanitation tariff data for the four metropolitan municipalities Cape Town, Johannesburg, Tshwane and eThekwini were obtained from their respective websites [8][9][10] and [11], as well as third-party reports [12].
  • Where water restrictions were in place and water restriction levels changed during the course of a municipal year (such as in Tshwane or Cape Town), the tariffs for the water restriction level that was in place for most of the year was used to calculate the average tariffs for the different income levels.
  • Tariffs for all income group were calculated based on the ‘single dwelling houses’ category and not for apartment buildings.
  • ‘Indigent’ tariffs were not applied in calculation of the average tariffs for the lower income group (in other words, this group is not representative of the ‘lowest’ income group, but rather the ‘lower’ income group).
  • All tariffs are VAT inclusive.
  • All tariffs are metered tariffs (as opposed to prepaid tariffs). However, for most municipalities and in most years metered & prepaid tariffs are structured the same.
  • For the period 1996 to 2002, the water tariff data obtained excluded sanitation tariffs. The sanitation tariffs for this period for each of the four metro municipalities (Cape Town, Johannesburg, Tshwane and eThekwini) were estimated using the respective municipality’s average sanitation tariff as % of total water & sanitation tariff for later years for which full data was available.
  • Disposable income data was obtained from Reference [13].
  • No water & sanitation tariff data could be obtained for the four-year period 2003 to 2006. For this period, linear interpolation was done between the 2002 and 2007 tariffs for each municipality.
  • Average tariffs across the four metro municipalities in the study (Cape Town, Johannesburg, Tshwane and eThekwini) were calculated as simple averages (in other words, not weighted by measures such as population size).

Appendix B. References


[b] ‘Disposable income’ is defined as the total income after tax (in other words before expenses), not income after expenses.

[1]. Goliger, A. and Cassim, A. (14 and 15 July 2017). Tipping Points: The Impacts of Rising Electricity Tariffs on Households and Household Electricity Demand. 3rd Annual Competition and Economic Regulation (ACER) 2017 Conference, Dar es Salaam, Tanzania. Website: Last accessed: 2017/08/21.

[2]. Viljoen N. 2015. City of Cape Town Residential Water Consumption Trend Analysis 2014/2015. Website: Last accessed: 2020/08/02.

[3]. Bailey WR, Buckley CA. 2004. Modelling Domestic Water Tariffs. Proceedings of the 2004 Water Institute of Southern Africa (WISA) Biennial Conference. Cape Town, South Africa, 2-6 May 2004. Website: Last accessed 2020/08/02.

[4]. Eskom Tariff History. Website: Last accessed: 2020/08/04.

[5]. Focus Economics. Inflation in South Africa. Website: Last accessed: 2020/08/04.

[6]. Bureau for Economic Research. Inflation Expectations. Website: Last accessed: 2020/08/04.

[7]. Statistics South Africa. CPI headline inflation history. Website: Last accessed: 2020/08/04.

[8]. City of Cape Town Tariffs. Web pages:,%20notices,%20tariffs%20and%20lists/L3-WaterSanitationRestrictionTariffs.pdf

[9]. City of Johannesburg Tariffs. Web pages:

[10]. City of Tshwane Tariffs. Web pages:

[11]. eThekwini Tariffs. Web pages:

[12]. Third-party websites used as sources for municipal electricity, water & sanitation data:

[13]. South African Reserve Bank data. Website links:

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Micro-Grid Solutions in Africa

Micro-grid and off-grid home solar systems are being rapidly deployed in Africa where power utilities have failed to keep up with demand. Many Africans are still without electricity or still struggling to access electricity especially in rural communities. The only solution to this is by introducing micro-grid energy.

While South Africa has the highest electricity consumption in the sub-Sahara region, the demand continues to outpace the installation of generation capacity. Africa is rich in renewable energy sources which remain the most economical approach for powering micro-grids. However, the development of micro-grids faces several barriers that must be unpacked.

Chief Executive Officer, Jay Naidoo, explained that energy poverty is a universal issue and that it affects the rural areas too far from the main grid and too expensive to electrify by extending the main grid. 

“Micro-grids are emerging as an effective off-grid solution that can close the energy poverty gap and can supplement the existing electrification program,” said Naidoo.

Naidoo added that further research and development is needed for the micro-grids of the communities.  

When these micro-grids are combined with batteries/generators or other grid systems, they can produce or provide an affordable source of power.

“Unfortunately, the continent is trailing behind most others with regards to energy security, bringing about an increase in awareness to provide energy to the millions of African people without it. The most common challenge the African energy sector continues to face is funding for energy projects,” Naidoo continued.

Many African countries have seen rapid and meaningful economic growth in the last decade, and to ensure the sustainability of this growth, these economies rely heavily on accessible, affordable and efficient energy. Urgent investment and research are required into the scalability of microgrids in rural and highly people dense areas to help prevent mass power outages such as the ongoing load shedding that has become a permanent occurrence in the South African power landscape.

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Switching to solar? This is what you need to know

While Eskom and NERSA continue their legal battles, and with the specter of a rumored 10% tariff hike waiting in April 2021, most cash-strapped households and businesses might very well be asking what this means for them?

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Benefits of using a grid-tied system during the pandemic

Electricity continues to be a huge problem in our country during the pandemic, where further load shedding is being experienced due to cable theft. This not only impacts the residential sector but also both commercial and industrial power users. A solution to alleviate the lack of security of supply is by installing solar panels and batteries at businesses or households, especially at essential services such as hospitals where power is needed the most. Given the impact of the pandemic, hospitals need constant power to ensure patient’s care.

Solar panels coupled with a battery storage solution provides a good alternative for the medical fraternity. Such an installation results in reduced consumption of grid power, yielding immediate savings through a lower monthly electricity bill.

The Head of Engineering for IMPower Pty Ltd, Gabriel Kroes, explained that the solutions have been designed to partially displace municipal power with more affordable and cleaner energy. 

“These systems are therefore designed to save you money, however, they do not typically have the ability to function as standalone systems during a blackout/loadshedding as it does not include battery/storage technologies. Battery storage or generator integration would need to be added to enable the technology to function during a blackout,” said Kroes. 

Batteries are useful for in the following scenarios:

1.Curtailment Reduction/Deferral: Storing excess generation so that you can use it when you need it (if you have excess generation).

2.Arbitrage: Displacing “peak” energy consumption and therefore, peak energy costs. Basically swopping out solar energy or even cheap “off-peak” grid energy for “peak” grid energy, so that you can benefit from the cheaper tariff. This is called energy arbitrage. A simple example is to charge the battery at let’s say R1 per kWh during off-peak times and then to discharge this energy during peak times when energy charges would have been R2.50 per kWh. In this case, you are saving R1.5 per kWh for the energy that flows through the battery.

3. Backup: providing electricity when the grid is off. This is very similar to mini or micro-grid solutions where the solar PV and battery system operates as a “stand-alone” energy supplier to the off-taker. Usually, to save costs, these systems are only designed to provide power to essential loads such as emergency lighting, security, servers.

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VIDEO | How to bring affordable sustainable electricity to Africa


Energy poverty, or the lack of access to electricity and other basic energy services, affects nearly two-thirds of Sub-Saharan Africa. As the region’s population continues to increase, so will the need to build a new energy system to grow with it, says Rose M. Mutiso.

In a bold talk, she discusses how a balanced mix of solutions like solar, wind farms, geothermal power and modern grids could create a high-energy future for Africa — providing reliable electricity, creating jobs and raising incomes.

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Eskom piles higher tariffs on consumers

Eskom pending higher tariffs would pile pressure on cash-strapped households and business buckling under the impact of the Covid-19 pandemic.

South Africa’s High Court on Monday sided with Eskom in a dispute over the amounts the National Energy Regulator of South Africa (Nersa) allowed the state utility to claw back from customers for electricity supplied in the 2014/15, 2015/16 and 2016/17 financial years. Nersa’s 2018 decisions to allow Eskom to recoup R32.69-billion via a mechanism known as the regulatory clearing account (RCA) for those three years have been set aside, and it must now come up with new decisions.

Monday’s ruling could lead to higher power tariffs, as the court said it appeared Nersa had disallowed Eskom money for lower-than-forecast revenue based on a “fundamental factual error”. It said disallowing some coal costs was not rational. Higher tariffs would pile pressure on cash-strapped households and business buckling under the impact of the Covid-19 pandemic, but they would be a relief for Eskom, which is mired in financial crisis and has long said the regulator has treated it unfairly.

While the rest of the world has made the move to new technology and LED lighting, most South Africans continue to use old inefficient fluorescent & discharge lamp technology, losing out on the energy-saving, environmental and cost-saving benefits of LEDs. Factors preventing the uptake of LED include installation and replacement costs and the reluctance of consumers to change. However, this does open up replacement opportunities for local companies, as does solar lighting.

LEDs reduce energy consumption by up to 70% for HIDs, and 45% for fluorescent. An 85-watt induction luminaire consumes 50% more energy than the LED alternative with the same lumen output. Bottom line is you will see immediate savings from implementing this technology.

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Helpful tips to reduce your electricity bill

For many households, winter is usually an expensive time of the year when it comes to electricity costs. Most households tend to spend more on electricity during winter, but there are many cost-free ways to save.

Monitoring monthly energy consumption is one-way customers can save significantly. Whether a credit metering or a prepaid meter is used, know the tariff and keep track of how much electricity is used. It is important to be mindful of seasonal differences too as most homes use more electricity in winter.

Water-wise tips to save electricity

The biggest potential cost saver is the geyser.

Turn it off and only turn it on an hour or two as required per day. Turn the geyser down to 60°C. Turning your geyser down from 70˚C to 60˚C will see a 5% reduction in your hot water electricity bill.

Use less hot water. Tackle excessive use with more efficient habits:

Do not let the hot water run unnecessarily. Use cold water to wash hands instead of hot water. Use a basin plug when washing.

Shower instead of bathing. You will save up to 80% in water and use five times less electricity than heating bathwater if you take a short shower.

Electricity saving tips around the house

  • Dry your laundry using sunshine where possible and try not to use the tumble dryer. For rainy days, use drying racks indoors.
  • Replace regular bulbs with energy-saving ones, such as LEDs, that use six times less electricity.
  • Seal gaps around windows and doors to keep heat from escaping and cold drafts from breezing in.
  • When you switch off appliances at the wall, you could save up to 6% more electricity. Pull out the charger from the wall too, this adds to your savings.

Use a stove plate that’s most similar to the size of your pot.

An electric stove uses up to 40% of its heat when the pot is too small, which means you waste electricity. If you own an insulation cooker, bring your food to a boil then place it in there. The retained heat slow-cooks, saving up to 60% on energy.

Use warm water bottles instead of electric blankets to help keep electricity costs down.

The City’s Mayoral Committee Member for Energy and Climate Change, Councillor Phindile Maxiti said that reducing a household’s energy does not have to be an expensive endeavour. 

“Making smarter energy decisions not only saves money each month but also helps in our collective efforts to reduce the impact of climate change.”

It is important to note the City’s new financial year starts on 1 July 2020, with associated small but necessary price increases.

The City will resume residential meter-reading at a lower Covid-19 restriction level. When the actual billing resumes, customers could, however, see an increase in electricity usage, as more people were home during the National Lockdown period. This increase could reflect on municipal bills, but using electricity smarter could help households reduce the impact of higher bills too.

Consider switching to prepaid electricity, as prepaid metering will allow for easier monitoring on a month to month basis. With real-time awareness of electricity usage when using a prepaid meter, customers could see substantial drops in their energy consumption.  

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Photovoltaic industry responds to new electricity regulations

The new draft amendments to the Electricity Regulations on New Generation Capacity has left the Photovoltaic Industry disappointed. The response comes on the eve of the period for public comment closing at the month. 

Mineral Resources and Energy Minister Gwede Mantashe announced new draft amendments which aimed at the end of May. These amendments aimed to clarify the regulatory regimes that apply to municipalities for procurement or development of power generation capacity. The public had 30 days from the date of gazette to provide comments.

The COO for the South African Photovoltaic Industry Association (SAPVIA), Niveshen Govender, said that the organisation was pleased with the implementation of President Ramaphosa’s announcement as delivered in his 2020 SONA speech.

“The solar industry is eager for clarification as the Draft New Generation Capacity Regulations continues to fall short of addressing municipalities’ needs as demonstrated in the court proceedings between the City of Cape Town and the Gauteng High Court.”

The Regulations allow a municipality to apply to the Minister of Mineral Resources and Energy for a determination in terms of Section 34 of the Electricity Regulation Act and require that this determination must be made in accordance with the national Integrated Resource Plan (IRP) for electricity.

City of Cape Town to contest new regulations

The City of Cape Town is contesting that it does not require a Section 34 determination but that it is free to generate and procure energy from independent power producers in terms of their own energy planning and not only in terms of national prescripts.

For any government procurement program for utility-scale projects, SAPVIA supports the central procurement through the Independent Power Producers Office (IPPO) but recommend the removal of caps on private embedded generation to allow the market to procure these projects in a safe and legal manner with no cost and at the highest speed for the State.

Allocation for private procurement should not be sterilised by state procurement. The current determination is not clear on what allocation will be left for a distributed generation under IRP but private procurement is far quicker and less costly.

There is a risk that the 2000MW will not be enough to deal effectively with the challenges of load shedding. Another risk is that the full 2000MW allocation in the IRP will be assigned to a public procurement programme thereby destroying the own use generation market and thousands of jobs.

“We believe that the following assumptions regarding the energy availability factor were incorrect and the supply shortfall is in fact nearly double what was assumed. In this case, these allocations will not be sufficient to ensure the security of supply in the short and medium-term.”

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