Solar electricity prices are a big incentive – but how many benefit?
In South Africa, solar prices are relatively low – that is, if you compare them to the ongoing cost of relying on the national electricity provider, ESKOM. Unfortunately, ESKOM’s long-standing issues with corruption and poor infrastructure maintenance mean the entire nation is paying a high price for energy, regardless of its source. Even with solar energy, households and businesses alike are penalised by the realities of a broken system.
The real winners in this situation are those who can afford to go off the grid completely, generating their own solar energy. While it’s encouraging to see more households achieve energy independence, the high upfront installation costs are a barrier for most. For the average consumer and even for most businesses – from farms to mines and retailers – solar energy remains out of reach, leaving them at the mercy of ESKOM’s unpredictable and expensive electricity supply. Despite solar’s potential to reduce costs, it is still largely a privilege for the few, not a widespread solution.
This situation is quite different from what’s happening in parts of Europe and the U.S., where excess solar generation has driven electricity prices to the point of being negative at certain times. In these regions, the abundance of solar energy, combined with flexible grids, has meant that utilities occasionally pay customers to use electricity. In Texas and California, for instance, the market has been forced to adapt to the overwhelming supply, driving prices down, even below zero in some cases.
But in South Africa, solar remains underutilised, with systemic and infrastructural barriers keeping the promise of affordable energy just out of reach for most. For now, we remain far from the point where solar outcompetes coal and nuclear on a scale that truly benefits the majority.
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The average household electricity tariff has seen a dramatic increase, rising from 19.59 cents per kWh in 2007/2008 to about 166 cents per kWh in 2023/2024, indicating a significant rise in conventional electricity costs 1. This context makes solar energy an increasingly attractive option for consumers looking to mitigate rising energy expenses.
The price of solar electricity in South Africa varies based on several factors, including the type of installation and the specific region.
Cost of Solar Electricity Production
The cost of producing solar electricity has significantly decreased over the years. As of 2023, the average cost of solar PV in South Africa is approximately R0.90 per kWh for large-scale installations, down from R3.35 per kWh in 2011 2.
Cost of Solar Electricity Sold
The feed-in tariff for small-scale embedded generation (?1 MW) is set at R0.7008 per kWh in areas like Cape Town and Durban 7. This is the price at which homeowners can sell excess electricity generated from their solar systems back to the grid.