Increasing tariffs and the threat of load shedding and water scarcity paint a bleak picture for homeowners who are reliant on the South African grid. The upside, however, is that these issues are forcing many to go green, downsize or seek self-sustainable homes with energy-saving alternatives and greener living solutions.
Eskom’s proposed 15% increase over three years for consumers has, for instance, seen a growing number of homeowners seriously considering ways to get off the electricity grid. This puts the electricity supplier at risk of losing customers. Currently, however, the cost of investing in a solar and green solution remains high and “probably unaffordable for most South Africans”, says Herschel Jawitz, chief executive Jawitz Properties.
“The irony is that South Africa has an ideal climate for solar energy with hot summers and mild winters. “In reality, more and more people will most likely find ways to use less electricity, which will impact on Eskom’s revenue and ability to invest in supplying cheaper electricity. The real issue is competition. South Africa needs more than one supplier.
Monopolies are never good for the consumer.” Brett John Petzer, founder of the Green Housing Company that assists homeowners and businesses to find green solutions for their homes and buildings, says water scarcity and electricity issues are a worldwide phenomenon.
“In Joburg, in particular, with an ageing electricity infrastructure, we are heading back to ferocious load-shedding. I predict weeks on end of no electricity, not just an hour here and there”. He says his clients call him in to do a complete green audit, but because the costs to get completely off the grid range from R250 000 to R450 000, many do it in stages.
“We find people are taking what they would spend on Eskom and converting that into a finance package to pay for equipment to get off the grid. “In Gauteng we have had a 375% increase in tariffs, so you will find a home that used to pay R2 000 a month is now paying R12 000 for electricity. It is unsustainable.”
Although initial capital investment might be a barrier, financial institutions are increasingly viewing renewable energy projects as “bankable”. This is a sign of trust and confidence in the strength of the technology and the sector, says Dominic Wills, chief executive of SOLA Future Energy.
Jawitz says there is no doubt rising utility costs are impacting on homeowners, “not only in terms of finding ways to reduce power use, but also contributing to the trend of more people downsizing from larger homes to more compact abodes offering more affordable living, and they’re making this decision sooner than anticipated”.
Janine Myburgh, president of the Cape Chamber of Commerce says “we have had a decade in which municipal rates and tariff increases, with a couple of exceptions, have been well above the inflation rate.
“This has hit many people hard, especially those living on fixed incomes. The result is that many have had to do some serious rethinking and replanning their lives.”
FNB economist John Loos agrees utility prices and municipal rates remain troublesome and are incentivising a shift to alternative sources of power. Municipal rates and non-electricity utilities tariffs (“water and other services” CPI) were “the most troublesome”, recording year-on-year inflation of 11.1%.
The CPI for electricity and other fuels showed 7.73% year-on-year inflation, also well above overall CPI inflation. “The long-term trend of municipal rates and tariffs inflation far outstripping general inflation raises affordability challenges for tenants and owners, incentivising a shift to alternative sources of power to Eskom, and incentivising better use of property/space,” says Loos.
What is off the grid?
SERVICES ON TAP Municipal provision of water and power are increasingly costly. Picture: Supplied
The municipal services provided to homes, known as “the grid”, include services that homeowners are connected to and pay for, such as water and electricity. Property owners can choose to go completely off grid by becoming 100% self-sufficient, or partially offgrid by installing energy-efficient and environment-friendly solutions.
For example, continuing to use municipal water services, but generating free electricity through solar panels is going partially off grid. Living off the grid is ideal for many South Africans, especially in light of the recent increases in electricity and water tariffs, the scarcity of water and the latest threats about load shedding, says Jawitz Properties, adding that homes featuring energy saving alternatives and greener living solutions are more in demand and are selling at premium prices.
Many ways to reduce costs
POWER CUT Gas is becoming increasingly popular for cooking. Picture: Supplied
Using less electricity has never been easier, says The Cape Chamber of Commerce.
- Batteries are improving and becoming more affordable and electric appliances are becoming more efficient.
- LED lights use half as much electricity as fluorescent tubes and about 10% of power used by incandescent globes.
- More people are using gas for cooking and heating.
City of Cape Town authorities burn consumers
HEATED REACTION Fines for unregistered rooftop solar panels have been slammed as excessive. Picture: Kim Stone
Fines issued by the City of Cape Town of more than R6 000 to homeowners who did not register rooftop solar panels by the end of February were excessive and should not be necessary, and the threat to disconnect supplies was over the top.
Janine Myburgh, president on the Chamber Commerce, said the City had initially adopted an enlightened approach to solar and understood the electricity industry was changing. Its policy was based on keeping consumers tied to the grid because it did not want to lose them as customers.
“That was good thinking, but now we have warnings and threats. It is bad public relations and is likely to anger many. The result will be that many people will decide to go off-grid and the City will lose out,” Myburgh said. The fine was excessive, just as the proposed charges for water during the drought had been.
“It seems the City has learnt nothing from the angry reaction to its demands. Its answer to every problem seems to be to find new ways to extract money from its citizens. It is time it reversed this policy and instead found ways to reduce its own costs.”