South Africa’s April Energy Crisis: How Switching to Solar Can Protect Your Finances

It might surprise some, but we are still experiencing an energy crisis that impacts households and businesses. On April 1, 2025, electricity tariffs for Eskom customers will increase by 12.7%.

The standard tariff increase will be from 195.95 c/kWh to 220.92 c/kWh for direct customers.

Eskom has warned South Africans that April will be particularly challenging due to the escalating load-shedding stages and its planned tariff increase.

Also, Nersa chairperson Thembani Bukula announced that the Energy Regulator approved increases of 5.36% and 6.19% for Eskom’s 2026/27 and 2027/28 financial years.

With these electricity hikes on the cards above the inflation rate (4.4% for 2024) increases, South Africans should start planning how to accommodate these increases financially.

One way to offset these cost increases is by switching to solar energy.

Moving towards supplementing your energy requirements with solar energy is a sustainable, cost-effective solution that will help you deal with upcoming financial burdens.

So, what are the financial benefits of switching to solar?

The Financial Benefits of Solar Energy

Investing in solar power can provide long-term financial relief and energy security, which is needed right now.

The key financial benefits of using solar energy include:

Significant Electricity Savings

The main benefit of installing a solar system is reducing your dependence on Eskom and using your own generated electricity.

While the upfront investment in solar panels, inverters, and batteries can be substantial, the forecast electricity hikes will pay them off sooner.

To determine whether your purchase will generate savings, you must decide if the transaction has a healthy return on investment (ROI) and payback period.

Working out your ROI will give you an accurate idea of how much of a financial benefit you’ll receive compared to your initial investment:

The total lifetime savings estimate represents how much money you will save on electricity over the solar system’s lifespan. Solar panels last 20 to 25 years, so it’s a long time.

To calculate the payback period, the time it takes for your solar system to recoup its cost, use the following formula:

Protection Against Tariff Hikes

As mentioned, Eskom has received approval for tariff hikes from the Energy Regulator. Over the past decade, electricity prices in South Africa have increased significantly, with annual tariff hikes outpacing inflation.

This price increase, combined with the lack of a guarantee of uninterrupted electricity supply, makes solar an attractive option for locking in energy costs.

As energy costs continue to rise, individuals and businesses can invest in solar energy to offset these rising costs.

South Africa’s climate allows solar power investors to enjoy stable and predictable energy costs, improving budgeting and financial planning.

With fixed investment costs and little to no operating expenses, solar energy users avoid the volatility of Eskom’s tariff adjustments, ensuring long-term savings and financial stability.

Government Incentives And Tax Benefits

Businesses can benefit from tax incentives such as Section 12B of the Income Tax Act, which allows companies to deduct 100% of the cost of renewable energy installations in the first year.

VAT exemptions may also apply to specific solar components, lowering the upfront cost.

Some municipalities are exploring feed-in tariff programs, enabling solar users to sell excess energy back to the grid for a credit on their electricity bills.

These incentives make solar energy more accessible and financially attractive, reducing entry barriers and increasing long-term cost savings.

Increased Property Value

Homes and businesses with solar installations are more attractive to buyers and tenants due to lower utility costs and increased energy independence.

Properties equipped with solar systems are often appraised at a higher value, as buyers recognise the long-term financial benefits and sustainability of having an independent power source.

Convinced that solar is the right financial move? Here’s how to make the switch.

Making the Switch to Solar

Besides securing the investment capital, switching to solar involves the following steps:

Step 1: Assess your Energy Needs

Determine your electricity consumption to select the right solar system. Working out what size system you need and other elements.

Step 2: Choose A Reputable Solar Provider

Choose accredited suppliers to ensure high-quality installation.

Eskom is pushing for legislation to mandate that private solar systems meet specific standards and be fitted by qualified installers. Choosing a bad installer can cost you more in the long run.

Step 3: Monitor and Maintain your System

Solar systems need minimal upkeep. However, Regular maintenance ensures optimal efficiency and longevity.

Now is the Time to Switch to Solar

With South Africa’s energy crisis showing no signs of resolution, switching to solar is more than just an environmental choice. It’s a strategic financial decision.

By investing in solar energy, businesses and households can protect their finances, reduce operational disruptions, and gain long-term energy security.

Now is the time to take control of your electricity future and safeguard your financial well-being against the unpredictability of Eskom’s power supply.