Brace for Impact – What the July Electricity Tariff Increases Could Mean for Your Business

Electricity tariffs are about to change again, and if you’re running a commercial or industrial operation, you’re likely to feel it. While the final numbers haven’t been released yet, businesses can’t afford to wait for their July invoice to start reacting.

Here’s what we know – and what you should be doing now to protect your bottom line.

What We Know So Far

NERSA approved an average tariff increase of 11.3%, which Eskom can charge the municipalities, effective 1 April 2025. . The municipalities will in turn implement their tariff  increases on 1 July 2025.

That part is clear. What’s not clear – and won’t be for a while – is exactly how much each municipality will increase their individual tariffs and sub-tariffs. The application and approval process between Nersa and the municipalities is slow and inconsistent. Some increases won’t be made public until long after they’ve already taken effect.

Why Businesses Should Expect Higher-Than-Average Increases

When municipalities apply for their increases, they don’t apply a flat rate across all tariffs. Instead, they shift the burden between different user groups. Businesses – especially large power users – are typically charged more.

Why? Because companies are seen as less likely to default and more likely to absorb higher costs. Municipalities know that businesses rely on power to operate, and they take advantage of that stability. Residential users often receive some protection due to the risk of social unrest. That same protection doesn’t extend to commercial users.

What Makes Budgeting So Difficult

Even if your business is trying to plan ahead, the structure of municipal tariffs makes it difficult. Each municipality offers multiple tariffs and sub-tariffs, and the increase NERSA approves is only an average. Municipalities can raise some tariffs more than others – as long as the overall average is within the approved limit.

In short, your business could see a much steeper increase than the official 11.3%.

To make matters worse, many municipalities delay publishing the new tariffs, and some never upload them to their websites at all. That means the first time you see the real impact might be when your July invoice arrives.

Risks Businesses Might Overlook

• Assuming the increase will be minimal or consistent across categories

• Staying on an outdated tariff that may no longer be the most cost-effective

• Not factoring in increased demand charges or (hidden) penalties 

• Falling behind competitors who are already managing their power usage and demand more strategically

What You Can Do Right Now

If you want to stay ahead, now is the time to act. There are several practical, proven ways to reduce exposure to rising tariffs.

1. Review your current tariff

You may be eligible for a more affordable tariff within your municipality. But tariff changes are often buried in red tape. In many cases, you’ll need the help of professionals who know the right channels to push changes through.

2. Shift production to off-peak times

Night-time and weekend rates are generally cheaper – especially during winter. Even small adjustments to production schedules can add up over time.

3. Improve site efficiency

Replace outdated equipment, avoid rewinding motors, and fix leaks in compressed air systems. Simple changes like switching off machines not in use can make a noticeable difference.

4. Flatten your demand profile

Avoid starting all machinery at once. Run fewer machines over a longer period to lower your maximum demand charges. This technique, known as peak shaving, helps reduce the surges in electricity usage that result in higher costs.

5. Maintain or install power factor correction (PFC) equipment

If you already have a PFC system, make sure it’s working properly. If you don’t, installing one could reduce your bill by 5–20%, depending on your site’s conditions. It’s one of the most reliable ways to lower demand charges and eliminate unnecessary penalties.

6. Consider long-term solutions

If budget allows, solar and battery systems can reduce reliance on the grid. While the upfront cost is significant, many businesses have had success securing off-balance-sheet financing to make it work.

A Note for Businesses Planning Expansion

If you’re considering a new site or expanding operations, be sure to check the electricity tariffs in that area. Some municipalities charge over 400% more than others for maximum demand. Once your facility is built, it’s difficult and expensive to relocate. But choosing the right area from the start can have a major effect on profitability.

Don’t Wait for the Bill to Take Action

By the time you see your July invoice, it may already be too late to make a meaningful change for the current billing cycle. But there’s still time to plan ahead for the months that follow.

At Alpha Power Solutions, we work with commercial and industrial clients across South Africa to improve power quality, reduce costs, and take the guesswork out of energy management. Whether you need a power factor correction system or help understanding your tariff options, our team can help.

Want to see what you could save? Try our free Power Factor Correction Calculator or contact us for a consultation. We’ll help you take the next step with clarity and confidence.