The National Energy Regulator of South Africa (NERSA) has approved a 12.7% electricity tariff increase for the 2025/26 financial year, effective from April 1, 2025. While this increase is lower than Eskom’s initial request of 36%, it still significantly exceeds the current inflation rate of approximately 3%, adding further financial strain on businesses.

Electricity tariffs in South Africa have been rising consistently, with some reports indicating annual hikes of over 15%. These escalating costs are prompting businesses to rethink their energy strategies. 

For manufacturers, retailers and other energy-intensive sectors within the commercial and industrial sector, electricity is not just an expense - it is critical for maintaining competitiveness. Every tariff increase raises operating costs, constrains margins and makes long-term planning even more challenging. 

Richard Flamand, Country Lead of Candi Solar South Africa notes, “Previously, load shedding was the primary driver for investment in solar PV and battery storage, as businesses sought alternatives to keep operations running. Today, the conversation has shifted. Investing in solar and battery storage is about taking control of energy costs, locking in long-term savings and building financial resilience in an unpredictable market.”

With electricity prices on an upward trajectory, businesses are looking for ways to hedge against financial risk. “Solar energy is now a strategic investment, with South Africa’s installed capacity projected to grow by over 11% annually from 6.05 gigawatts in 2024 to 10.27 gigawatts by 2029. This rapid growth highlights the increasing role of solar energy in mitigating electricity expenses and providing a stable energy source for businesses,” explains Flamand. 

At the same time, advancements in battery storage technology are making solar solutions more efficient and valuable. The South African battery storage market is expected to grow from 270 MWh in 2020 to 9,700 MWh by 2030. As technology improves, battery storage is becoming more affordable and scalable, allowing businesses to store excess solar energy for peak demand periods and further stabilise their electricity costs. 

Looking ahead, tariff increases will remain a pressing issue, reinforcing the need for proactive energy planning. Businesses that diversify their energy sources now and invest in cost-saving renewable solutions will be better positioned to navigate the evolving energy landscape and protect themselves from ongoing price volatility.