One of the most revolutionary changes in history in the electricity sector of South Africa, which is directly connected to the consumers, is happening right now. The Electricity Regulation Amendment Act 38 of 2024, commonly referred to as ERAA, was enacted and brought into force in August 2024. It has immensely transformed the whole electric power sector. Below is a very brief summary for the homeowners.
Opening the Market & Competition
Competition has entered the electricity sector with the new law abolishing the old power supply model monopolized by Eskom like a disappearing act and establishing a new electrical marketplace however, this is through the following and not the least among the factors:
- The formation of a new Transmission System Operator SOC Ltd (TSO) which will take five years to be an entirely independent body managing the national transmission grid, with the interim role going to the National Transmission Company of South Africa (NTCSA).
- Large and small-scale generators (including renewables) would be able to connect with transparent, non-discriminatory, and fair access regulations that would assure it.
- Electricity being traded wholesale (the buying and selling of electricity) is now the new way of doing it rather than relying on Eskom model that depended on purchasing only from the sole buyer.
- The change in market conditions will be huge for households: over time, consumers will have a wide range of choices for electricity supply, and competition might result in lower prices, plus by having a solar/wind system even more sources will be available for domestic households.
Tariffs & Billing Structure Changes
The market monopoly’s liberation did not only usher in new regulations and price norms but also made way for the development of simpler and clearer tariff structures that were to demonstrate unobstructed pricing:
- As an example, the very first price increase that was allowed for Eskom direct-customers for the fiscal year 2025/26 was approximately 12.7% at the beginning of 2025.
- The new price plan will not only mean that pricing will be easier to understand but that it will also display the basic cost elements (energy use, capacity, network fees) which in turn will make customers more aware of their bills.
- A new set of rules, for instance, will apply to homeowners with solar power systems or private electricity generation; they will have to follow a different process if they want to sell their excess electricity to the grid and be paid for it.
- You may find it difficult to accept that the new electricity bill structure would be such that the new rules would finally compel the solar homes to evaluate their savings models. It is, therefore, prudent to watch your bill very closely and be aware of all the charges.
Wind Power, Households, & Small-Scale Generation
The government indicates its support of renewables and small-scale generation through the changes:
- The regulation that allows entry for smaller electric generators is loosened, making solar rooftops, power storage, and community generation feasible.
- The main emphasis will be on constructing the grid and incorporating the scattered generation sources.
- Impact on the residences: If you are thinking of setting up solar panels or batteries for backup or any other home generation, the complex legal process is becoming clearer.
Stricter Penalties & Infrastructure Protection
The new law has set up a harsh regime concerning penalties for damages to electricity infrastructure and sabotage. For example, the destruction of cables and machinery can lead to a fine of as much as a million rand, or a five-year prison term, or both. Even if the culprit did not personally steal the hardware, receiving it with the knowledge that it is stolen will result in a fine of over a million rand.
Residences will feel the impact: The new measures give top priority to the electricity network’s reliability—though such a reliable system is a community that stays put and grows with the addition of more households.
What should be done by Homeowners now?
Homeowners have to rethink their practices and make adjustments to more fully benefit from the new laws:
- The first step is to keep an eye on and analyze your monthly electrical consumption regularly and get to know the billing process. If you have solar panels, determine how the new regulations will impact net-metering and export credits by talking to the utility.
- If your new power plant is a solar plus batteries, then stay in contact with the authorities and check what licensing and registration requirements are under the ERAA.
- Listen for announcements from NERSA and your local municipality about changes to the new tariff or subsidy programs.
- Be mindful of the difficulties that come with the transition (e.g., access to the system, contracts) while the TSO is doing the transition and incorporate them into your home generation or provider switching plans.
- You can expect a new bill structure to come into effect, and if necessary, you may want to employ the same tactics (e.g., shifting power use to off-peak hours) to keep your costs at the same level.