If you pay an electricity bill in South Africa, you already know the pattern: tariffs go up every year, and budgets have to absorb it. The electricity tariff increase South Africa faces for 2026/27 is no different. The more useful question for a business owner is not whether tariffs will rise again, but how much that compounding costs you over the next five years, and what you can do about it.
What was approved for 2026/27
The National Energy Regulator of South Africa (NERSA) approved an average increase of 8.76% for customers supplied directly by Eskom from 1 April 2026. Municipal bulk purchasers apply an average increase of 9.01% from 1 July 2026, in line with the municipal financial year.
Your own increase depends on who supplies you and which tariff applies. Municipalities set their own end-user tariffs, so increases can differ significantly between cities and customer categories. Johannesburg, for example, approved an average electricity increase of 8.63% for 2026/27. Cape Town’s overall average increase was approximately 6.67%, although subsequent budget adjustments reduced the average increase for commercial electricity customers to 5.46%.
More increases are expected in 2027/28
Looking ahead, Eskom has indicated a proposed average electricity price increase of 8.83% for direct customers from 1 April 2027, with an 8.84% increase proposed for municipal bulk purchasers from 1 July 2027.
These increases follow NERSA’s earlier redetermination of Eskom’s allowable revenue after a calculation error was identified in its Regulatory Asset Base (RAB). The additional revenue recovery is being phased in over several financial years to limit the impact on electricity prices.
The proposed 2027/28 increases were still subject to the relevant NERSA tariff approval process as at November 2026.
Why compounding matters more than any single increase
A single increase of around 9% sounds manageable. Compounded, it is not.
Take a business that pays R100,000 a month for electricity today. If tariffs rise by roughly 9% a year for three years, the same consumption would cost about R129,500 a month. For Eskom direct customers, the two approved increases (8.76% and 8.83%) add up to roughly 18% in two years. These are illustrations, not forecasts, but they show why a “small” annual rise becomes a large line item.
Who feels it most
- Farms with irrigation pumps and cold storage that cannot easily shift their load
- Schools whose budgets are set a year ahead and rely on fees
- Sectional title schemes where common area electricity is passed to owners through levies
- Manufacturers and retailers with high daytime consumption and thin margins
The three ways businesses respond
Most organisations facing rising tariffs choose some mix of three responses:
- Use less:
Efficiency measures such as LED lighting, motor upgrades and load scheduling are usually the cheapest first step. - Shift when you use it:
Time-of-use tariffs reward moving consumption away from peak periods, sometimes with battery storage to help. - Generate your own:
On-site solar replaces a growing share of grid purchases with power at a rate that is known in advance.
The third option has historically been held back by upfront cost. That is where funded solar changes the picture: a financing partner designs, builds, maintains and insures the system, and you pay for the electricity it produces instead of buying the equipment. We explain how that model works in our guide to no-capex solar financing.
How to start planning
Before the next increase lands, it helps to get clear on a few numbers:
- Your average monthly consumption in kWh and your blended cost per kWh
- How much of your consumption happens during daylight hours
- Which tariff you are on, and whether it has demand or time-of-use components
With that in hand, you can compare what your grid costs are likely to look like in 2027 and beyond with what a funded solar solution could offer.
FAQ: Electricity tariff increase South Africa
When do the new tariffs apply?
Eskom direct customers pay the new tariffs from 1 April 2026. Municipal customers see increases from 1 July 2026, in line with the municipal financial year.
Will my increase be exactly 8.76% or 9.01%?
Not necessarily. Those are averages. Municipalities set their own end-user tariffs, so check your supplier’s published tariff schedule for your actual increase.
The bottom line
Electricity tariffs in South Africa have risen well ahead of inflation for years, and the approved increases for 2026/27 and 2027/28 continue that trend. Planning around that reality is far less painful than reacting to it.
Want to see what your next three years of electricity costs could look like with and without solar? Request a free feasibility assessment.