How Eskom’s 2025/26 electricity tariffs will affect residential customers

Eskom’s restructured residential electricity tariffs and new standard electricity tariff rates, which come into effect on 1 April, result in a 12.74% average electricity price increase for the utility’s 2025/26 financial year.

Some residential customers will experience a much higher increase than 12.74%, while others will see much lower increases. Some customers will even experience reductions in their monthly electricity spend.

Eskom has three main suites of residential tariffs: Homelight, Homepower and Homeflex.

Homelight 

The Eskom Homelight tariffs are divided into two options: Homelight 20A and Homelight 60A.

The Homelight 20A tariff is intended for low-income residential customers with a limited capacity, 20 A, 1-phase, 230V AC supply, with a prepayment meter.

The Homelight 60A tariff is intended for low-income residential customers with a 60 A, 1-phase, 230V AC supply, with either a prepayment meter or a credit meter.

Homepower 

The Eskom Homepower tariff is intended for middle- and higher-income residential customers, and is divided into five options: Homepower 1, 2, 3 and 4, and Homepower Bulk, depending on the number of phases of the supply (one-phase, two-phase or three-phase) and the supply capacity.

For the study, only the Homepower 4 tariff comprising an 80 A, 1-phase, 230V AC supply is considered, as this covers the significant majority of Homepower residential customers, and is adequately illustrative.

The Homepower 4 tariff is implemented with a credit meter or a smart meter.

Homeflex 

The Eskom Homeflex time-of-use (TOU) tariffs are intended for middle- and higher-income residential customers that can respond to time-of-use pricing signals by shifting their energy consumption to standard- and off-peak periods of the day through selective use of home appliances.

In addition, the Homeflex tariffs are mandatory for residential customers with solar photovoltaic (PV) and battery energy storage (BES) systems.

The Homeflex tariffs are divided into five options: Homeflex 1, 2, 3 and 4, and Homeflex Bulk, in the same way as the Homepower tariffs.

Again, for this study, only the Homeflex 4 tariff comprising an 80 A, 1-phase, 230V AC supply is considered, as this covers the significant majority of Homeflex residential customers, and is adequately illustrative.

Homeflex tariffs require an expensive time-of-use smart meter with remote meter reading capabilities that can record both imported and exported energy separately for the different hours of the day (on-peak, standard and off-peak), types of day (weekdays, Saturdays, Sundays and public holidays) and seasons (summer and winter).

Changes in tariff structure  

Several changes have been approved by the energy regulator, Nersa, in respect of the Homelight, Homepower and Homeflex residential tariffs. These changes to the structure of the tariffs and the increase in the 2025/26 tariff rates have far-reaching impacts on the monthly electricity spending of residential customers.

The structural changes to Eskom’s residential electricity tariffs are detailed as follows:

Elimination of inclined block tariffs for Homelight 20A, Homelight 60A and Homepower 4 

Homelight 20A, Homelight 60A and Homepower 4 have been simplified by doing away with inclined block tariff rates.

For Homelight 20A, there were previously two separate energy rates — one for consumption of less than 350kWh per month, the other for consumption greater than 350kWh per month. Similarly, for Homelight 60A and Homepower 4 there were also separate energy rates — one for consumption of less than 600kWh, the other for consumption greater than 600kWh per month.

From 1 April, these former inclined block tariff rates for Homelight 20A, Homelight 60A and Homepower 4 will be replaced by flat energy rates that do not change depending on any defined consumption thresholds.

As a result, from 1 April, for customers with low energy consumption of less than 350kWh and 600kWh, the flat-rate energy components of the Homelight 20A, Homelight 60A and Homepower 4 tariffs will increase by 13.6%%, 18.3% and 9.5%, respectively.

On the other hand, for customers with consumption of greater than 350kWh and 600kWh, the flat-rate energy components of the Homelight 20A tariff will increase by only 0.2%, while those of the Homelight 60 and Homepower 4 tariffs will decrease by 30.4% and 31.9%, respectively.

Increased monthly fixed charges for Homepower 4 and Homeflex 4 

For Homelight 20A and Homelight 60A, there is no fixed monthly component in the tariffs.

However, for Homepower 4 and Homeflex 4, in addition to the variable energy component, there are fixed monthly components in the tariff that are charged whether energy is consumed or not.

With effect from 1 April, the fixed components of the Homepower 4 and Homeflex 4 tariffs will both increase very significantly by 88%.

Changes to the peak, standard and off-peak times of the Homeflex tariff 

With effect from 1 April, there will be several changes in the times of the peak, standard and off-peak periods of all Eskom’s time-of-use (TOU) tariffs, including Homeflex 4.

The morning peak period has been reduced from three hours to two hours, while the evening peak period has been increased from two hours to three hours. In addition, a two-hour standard period has been introduced on Sundays.

From 1 April, the revised times of the peak, standard and off-peak periods for weekdays, Saturdays and Sundays in the high-demand winter season (June, July and August), and the low-demand summer season (comprising the remaining months of the year), are shown below:

Fig 1: Time-of-use peak, standard and off-peak times applicable from 1 April 2025. (Source: Eskom.) 

Tariff rates for 2025/26 compared with 2024/25 

Tables 1, 2 and 3 detail the 2024/25 and 2025/26 tariff rates, and the associated tariff rate increases or decreases for the Homelight, Homepower 4 and Homeflex 4 tariffs, respectively:

Table 1: Tariff rates for Homelight 20A and Homelight 60A. (Data Source: Eskom)

(Note: The rates shown exclude VAT.) 

Table 2: Tariff rates for Homepower 4. (Data source: Eskom)

(Note: The rates shown exclude VAT.)

Table 3: Tariff rates for Homeflex 4. (Data source: Eskom)

(Note: The rates shown exclude VAT.) 

Residential electricity costs and increases 

Based on a customer’s monthly electricity consumption, the 2024/25 and 2025/26 Homelight 20A, Homelight 60A and Homepower 4 tariff rates are translated into electricity spend per month by the customer, together with the relevant percentage increase or decrease from 1 April, as follows:

Table 4: Electricity costs and increases for Homelight 20A, Homelight 60A and Homepower 4, 80A. 

Source: EE Business Intelligence. (Note: The costs shown exclude VAT.) 

Analysis of the impacts of the new tariff structures and tariff rates 

An analysis of the impacts of Eskom’s new residential tariff structures and tariff rates for the 2025/26 financial year is provided as follows:

Homelight 20A 

For the Homelight 20A tariff, which is intended for low-income and indigent customers with limited capacity 20 A prepayment meters, it can be seen in Table 4 that customers with low consumption of 350kWh and less per month face increases of 13.57%, which is above the average Eskom increase of 12.74%.

Customers on the Homelight 20A tariff using more than 350kWh per month experience progressively lower increases than the average Eskom increase of 12.74%. This is a direct result of eliminating the highly subsidised component of the inclined block tariff for monthly consumption of less than 350kWh per month in favour of a higher flat-rate energy tariff.

It is noted that indigent customers on the Homelight 20A are supposed to receive 50kWh of free basic electricity (FBE) per month, and this will, to some extent, offset the 13.57% electricity price increase for low-consumption indigent households in 2025/26.

However, it is recognised at the highest levels in the government that more than 80% of indigent households in South Africa are not on the relevant municipal indigent registers, and therefore a significant majority of indigent households do not, in fact, receive any free basic electricity from Eskom or their local municipality.

Homelight 60A 

For the Homelight 60A tariff, which is intended for low-income customers with prepayment or credit meters, it can be seen in Table 4 that customers with low consumption of 600kWh and less per month face increases of 18.26%, which is significantly higher than the average Eskom increase of 12.74%.

Customers on the Homelight 60A tariff using more than 600kWh per month will experience progressively lower cost increases than the average Eskom increase of 12.74%, while customers using more than 650kWh per month will experience significant cost reductions.

This is a direct result of eliminating the highly subsidised component of the inclined block tariff for monthly consumption of less than 600kWh per month, in favour of a higher flat-rate energy tariff.

Homepower 4 

For the Homepower 4 tariff, which is intended for middle- and higher-income customers with credit meters or smart meters, it can be seen in Table 4 that customers with consumption of 750kWh and less per month face massive cost increases significantly higher than the average Eskom increase of 12.74%.

Customers on the Homepower 4 tariff using 800kWh and more per month will experience significantly lower cost increases than the average Eskom increase of 12.74%, while customers using 1,100kWh and more per month will experience significant cost reductions.

This is a direct result of eliminating the inclined block tariff of Homepower 4 in favour of a flat-rate energy component, with a 31.9% reduction in the variable energy rate for consumption above 600kWh, and a corresponding massive increase of 88% in the fixed monthly component of the Homepower 4 tariff from R192.90 per month to R362.70 per month which impacts low consumption customers the hardest.

Homeflex 4 

For the Homeflex 4 tariff, it is not possible to determine the cost increase for various monthly energy consumptions based on the new tariff rates for 2025/26, as was done above for the Homelight and Homepower tariffs in Table 4.

This is because the actual cost increase/decrease will depend not only on the monthly energy consumption of the customer but also on the customer’s load profile and response to time-of-use pricing signals by shifting their energy consumption to standard- and off-peak periods of the day through selective use of home appliances.

Suffice it to say, however, that massive price increases in the Homeflex 4 summer and winter peak, standard and off-peak energy rates, as well as in the fixed monthly components of the tariff, come into effect on 1 April, as indicated in Table 3.

While there is a significant 60.8% reduction in “other variable charges” (ie, auxiliary, legacy and network charges), it should be noted that these form a relatively low portion of the total variable charges, thus reducing the impact of this reduction.

Conclusion 

The increases and reductions in a customer’s monthly electricity spend with Eskom detailed above result primarily from substantial increases in residential electricity tariff rates, as well as changes in the structure of residential tariffs that adjust the previous cross-subsidies between larger and smaller customers, between rural and urban customers, and between richer and poorer customers.

To the extent that the impact of Eskom’s restructured Homelight and Homepower residential electricity tariffs and tariff rates for 2025/26 result in higher electricity costs for smaller (generally poorer) customers and lower costs for larger (generally more well-off) customers, the perception is created that these adjustments are “anti-poor”.

The Homeflex 4 tariff is intended for middle- and higher-income residential customers that are in a position to respond to time-of-use pricing signals by shifting their energy consumption to standard- and off-peak periods of the day through selective use of home appliances.

While the Homeflex 4 tariff will have significantly increased time-of-use energy rates in 2025/26 across the board, these rate increases provide strong incentives to well-off customers to effect savings through load shifting.

Unfortunately, such cost savings are generally not available to smaller (generally poorer) customers that do not have the necessary home appliances needed to effect meaningful load shifting to standard and off-peak periods. This further cements perceptions that the Eskom structural and tariff rate adjustments detailed for residential customers are “anti-poor”. DM

Chris Yelland is the managing director of EE Business Intelligence and Outa’s energy adviser.

Copyright 2025 – EE Business Intelligence (Pty) Ltd. All rights reserved. This article may not be published without the prior written permission of EE Business Intelligence.