Several reports have swirled around for months about how Eskom was making changes to how it would charge people who have solar installations on their roofs.
One of the reasons these reports had such currency was that it was clear something would have to change. The current situation, where customers who use less Eskom power because they have solar and are effectively subsidised by people who use more Eskom power because they don’t, was immoral and unsustainable.
But there was also a disturbing lack of clarity about what Eskom really wanted to do. And, given the history of electricity, government, and electricity pricing in South Africa, it was perfectly rational to expect the worst.
Last week, as News24’s Carol Paton has now reported, it appears the worst is indeed in the offing.
Irrational fees
There are two separate issues here.
The first is the change in the tariff; in future, homes with solar will be charged on what is now called the Homeflex Tariff plan.
A large part of this is that the amount these customers pay to remain connected to the grid will increase.
This is because of the principle that everyone should contribute to the cost of the grid, because everyone uses it. It is for this reason that Joburg’s City Power recently started charging pre-paid users R200 a month for a connection fee.
This is distinct from the cost of the electrons; it is only for the network.
The argument goes that as customers with solar still want to use the network, and as they are relatively well-off, they must pay a large proportion for it.
While this may be contestable, it is at least rational.
But it is hard to see what is rational about Eskom’s plan to charge customers between R20,000 and R30,000 to register their solar installations.
Eskom’s justification seems to be that there may be some leakage of power from a customer’s solar installation into the main grid.
As Chris Yellend has explained, this means that Eskom believes all customers with a solar installation will need a very expensive meter (whether they are selling power to the grid or not) to properly measure the time electricity is consumed.
He also says that Eskom is demanding an engineer sign off on every installation, which appears unnecessary.
Read more: How Eskom’s 2025/26 electricity tariffs will affect residential customers
Eskom appears to be assuming that its customers who both have solar installations and wish to continue paying Eskom for some electricity supplies will pay this extra cost.
This assumption is probably wrong, for the simple reason that for the customers themselves, it would be irrational.
If you have been failed by a service to the point where you have to pay R150,000 for a solar installation, would you now shell out another R30,000? In return for which you would receive precisely nothing?
A much better option would be to pay that R30,000 into more solar capacity (many people might already be producing more solar power than they can store, while the price of battery storage is coming down).
Another option would be to spend R15,000 on a top-class generator for days when there is very little sunlight.
In other words, instead of paying R30,000 to Eskom for nothing, many people might instead invest that money in their own systems. They would keep the money for themselves, rather than pay it to Eskom.
And then they would simply no longer use any grid power.
Helpfully, Eskom itself says that people who do not comply with its demand for this large registration fee would be cut off from the grid. Which would save their customers the expense of doing that little operation themselves.
Councils take a different approach
The irrationality of Eskom’s position is illustrated by the fact that councils that supply electricity to people with solar installations have no plans to charge such high registration fees.
In other words, someone who lives in one part of Sandton, which is supplied by Eskom, would have to pay this fee while someone who lives in another part of Sandton, supplied by City Power, would be treated very differently.
This demonstrates what nonsense this clearly is. But it will provide a useful natural experiment.
Because Eskom and councils are approaching this in different ways, we will get a real-life demonstration of which approach is best.
If many people do leave Eskom’s grid to avoid paying the high solar registration fee, Eskom will get less money in the long run. Instead of getting money through network charges, and through the sale of electricity, Eskom will get nothing.
Read more: ‘Solar is the way to go’ to fight SA’s energy poverty, adviser in the Presidency tells conference
Meanwhile, councils that manage this sensibly will still get some revenue from these customers.
This gets to the heart of managing an electricity grid through its biggest transition in a century.
One of the major challenges in an environment where those who are richer can generate their own electricity is to prevent a situation where the rich no longer subsidise the poor. This will lead to the end of the grid, and the end of a major connection between different parts of our society (in a worst-case scenario, it would mean we live in a country of well-lit golfing islands amid a sea of darkness).
Instead, the aim needs to be to keep the rich and poor connected, even though this may be against the interests of the rich. Thus, they need to be encouraged and enticed.
Potential for political football
Unfortunately, it is now possible that our politicians will use this issue, along with other service delivery failures, to indulge in class warfare.
A politician may claim that people who do not register their solar installations are “breaking the law” by refusing to make this payment.
An early taste of this may have been when the City of Joburg MMC for Community Safety, the EFF’s Mgcini Tshwaku, made public comments about people who dug boreholes in their properties.
While it is perfectly legitimate for him to talk about the law, it seems odd that an MMC for Public Safety, usually associated with fighting crime, would now be talking about boreholes.
Of course, this goes in many directions.
Other parties, such as the DA, might well start to make public comments too, suggesting that Eskom is involved in a new attempt to further tax richer people.
In the end, there may be very little rationality in the entire argument.
Instead, Eskom should choose to determine what its real aim should be. And it should first be to ensure richer people stay on the national grid willingly. And second, to get as much money from them as possible through actually providing a service.
The current plan is unlikely to work and it will simply result in more people leaving Eskom permanently. DM