If you’ve noticed your electricity bill in Cape Town creeping up, you’re not alone. With the ever-rising cost of electricity, it’s important to get a clear picture of what you’re actually paying for and why. Whether you’re a homeowner trying to save a bit each month or a business owner juggling operational costs, understanding the cost of electricity Cape Town is key to staying on top of your budget.
In this guide, we’ll walk you through the current City of Cape Town electricity tariffs, explain how these prices differ between residential and commercial users, and dive into the factors that impact your bill. Plus, we’ll share some easy tips on how you can reduce those costs.
What Are the Current Electricity Tariffs in Cape Town?
If you’re wondering, what is the cost of electricity in Cape Town, it varies based on a three-tier tariff system. These tariffs are structured to cater to different types of residential users, which are categorized depending on:
- Your monthly usage (calculated over a 12-month average)
- The value of your property
- The type of electricity meter you have
- Eligibility for a rates rebate
Starting from 1 July 2024 till 30 June 2025, the City of Cape Town has updated the tariffs for the 2024/25 financial year based on Eskom’s price increases. Let’s break down the three types of residential Cape Town electricity tariffs available today:
1. Lifeline Tariff
The Lifeline tariff is specifically designed to help low-income residents with limited electricity consumption. To qualify, you need to be on a prepaid electricity plan with a monthly usage below 450 kWh on average, and your municipal property valuation must be under R500,000.
If you qualify, you’ll receive significant relief, including free basic electricity for usage up to a certain limit:
- 0 – 60 or 25 kWh: Free basic electricity allocation.
- Above 60 or 25 – 600 kWh: R2.37 per kWh (including VAT)
- Above 600 kWh: R2.37 per kWh (including VAT)
However, if you exceed the monthly limit of 450 kWh, you’ll automatically be moved to either the Domestic or Home User tariff. There is no service charge for Lifeline users.
2. Domestic Tariff
If your usage is above 450 kWh per month, you’ll fall under the Domestic tariff. This tariff is typically for households with higher electricity consumption.
The City of Cape Town electricity rates for this tier are as follows:
- 0 – 600 kWh: R3.91 per kWh (including VAT)
- Above 600 kWh: R4.75 per kWh (including VAT)
Unlike the Lifeline tariff, there’s no free basic electricity allocation here. This tariff applies to households with a municipal property valuation between R500,000 and R1,000,000 and a prepaid meter installed.
3. Home User Tariff
The Home User tariff applies if you don’t qualify for the other two options. Specifically, you have a property with a municipal valuation of R1,000,000 and above and a credit meter installed. This tariff includes a service charge on top of the consumption cost, which helps cover network maintenance and other fixed costs.
- 0 – 600 kWh: R3.44 per kWh (including VAT)
- Above 600 kWh: R4.75 per kWh (including VAT)
- Monthly service charge: R281.78 (including VAT)
Here’s a clearer picture of where your cost of electricity per kWh in Cape Town fall within the city’s structure:
| Tariff | Usage Range | Price per kWh (Excl. VAT) | Price per kWh (Incl. VAT) | Service Charge (Excl. VAT) | Service Charge (Incl. VAT) |
| Lifeline Tariff | 0 – 60/25 kWh | R0.00 | R0.00 | None | |
| 60/25 – 600 kWh | R2.06 | R2.37 | |||
| Above 600 kWh | R2.06 | R2.37 | |||
| Domestic Tariff | 0 – 600 kWh | R3.40 | R3.91 | None | |
| Above 600 kWh | R4.13 | R4.75 | |||
| Home User Tariff | 0 – 600 kWh | R2.99 | R3.44 | R245.03 | R 281.78 |
| Above 600 kWh | R4.13 | R4.75 | |||
How Do Electricity Tariffs Differ for Residential and Commercial Users?
The price of electricity in Cape Town is structured differently for residential and commercial users to accommodate the distinct needs and usage patterns of these two groups. While residential users typically pay a fixed rate based on their consumption, as we’ve explored above, commercial and industrial customers have more complex tariffs, which include additional charges based on their demand, usage time, and service requirements.
Let’s break down 2024/25’s cost of electricity per unit in Cape Town for commercial users:
Small Power Users
These tariffs are intended for businesses with low to moderate electricity consumption. The tariffs for small power users are broken down into three categories:
- Small Power User 1 (High Consumption): For businesses using more than 1,300 kWh per month.
- Small Power User 2 (Low Consumption): For businesses using less than 1,300 kWh per month.
- Small Power User 3 (Ultra-Low Consumption): For businesses using less than 250 kWh per month.
| Tariff Category | Service Charge per day (Excl. VAT) | Service Charge per day (Incl. VAT) | Energy Charge per kWh (Excl. VAT) | Energy Charge per kWh (Incl. VAT) |
| Small Power User 1 | R91.96 | R105.75 | R2.61 | R3.00 |
| Small Power User 2 | R7.25 | R8.34 | R4.59 | R5.28 |
| Small Power User 3 | None | R4.07 | R5.47 | R6.30 |
Large Power Users (Time-of-Use Tariffs)
For businesses consuming more electricity, especially at peak times, the Time-of-Use (TOU) tariff applies. This tariff means that the price you pay depends on when you use electricity—during peak, standard, or off-peak times. This system incentivizes businesses to shift their electricity usage to off-peak times to reduce their costs.
There are Large User LV (Low Voltage) and Large User MV (Medium Voltage) tariffs, as well as tariffs for High Voltage customers. The general breakdown for these tariffs during high demand June to August months, including VAT, is:
| Tariff(June to August) | Service Charge per day | Peak Energy Charge (R/kWh) | Standard Energy Charge (R/kWh) | Off-Peak Energy Charge (R/kWh) |
| Large User LV Time-of-Use | R202.10 | R7.78 | R2.74 | R1.74 |
| Large User MV Time-of-Use | R198.15 | R7.78 | R2.74 | R1.74 |
| Large User HV Time-of-Use | R198.15 | R7.50 | R2.65 | R1.69 |
These Time-of-Use rates allow businesses to avoid the higher peak charges by reducing energy usage during peak hours (07:00–10:00 and 18:00–20:00) and using more electricity during the off-peak hours (10:00–18:00 and after 20:00).
Demand Charges for Commercial Users
In addition to the energy charge, most large commercial users will also be subject to a demand charge based on their peak consumption. The demand charge is calculated based on the kW measured at the business’s highest demand during the month.
| Tariff | Demand Charge per kW | Network Capacity Charge per kW |
| Large User LV | R332.48 | R0.00 |
| Large User MV | R198.49 | R3.82 |
| Large User HV | R189.04 | R3.63 |
Investment Incentive Tariffs
Cape Town also offers special tariffs for businesses that qualify under the Investment Incentive Policy. These tariffs provide lower rates for businesses that meet certain criteria, such as job creation or significant capital investment.
What Factors Influence Electricity Pricing in Cape Town?
Electricity pricing in Cape Town is influenced by a range of factors that reflect both local and global conditions. Here are the key drivers of electricity costs in the city:
Cost of Generation
The price of electricity is largely driven by the cost of generation, which includes both local and imported energy. South Africa still relies heavily on coal-fired power plants (more than 80% of the energy mix), and fluctuations in coal prices directly impact generation costs. The City’s increasing investment in renewable energy like wind and solar also affects costs, as does the price of imported electricity from neighbouring countries.
Distribution and Transmission Costs
Electricity must be transmitted and distributed through the grid, and this incurs costs for maintenance, infrastructure upgrades, and transmission losses. The further electricity needs to travel, the higher the costs, especially in areas with older infrastructure.
Eskom’s Role
Eskom, the national power utility, plays a significant role in the electricity pricing structure of Cape Town. While the City of Cape Town generates and distributes its own power through the City of Cape Town’s electricity distribution network, Eskom still supplies a portion of the power used in the City. Therefore, any price increases from Eskom’s side—whether for generation or supply—are often passed onto customers.
Inflation and Economic Conditions
Rising inflation increases operational costs across the board, including electricity generation and grid maintenance. Interest rates also affect financing costs for infrastructure, which can be passed on to consumers in the form of higher tariffs.
Regulatory Policies and Taxes
Electricity pricing is influenced by national and municipal policies, taxation, and subsidies. The introduction of taxes, such as carbon taxes, or adjustments to VAT rates, can directly impact electricity prices.
How to Save on Electricity Costs?
While electricity costs continue to rise, there are many ways to use power more efficiently and reduce expenses. From simple adjustments to long-term solar power solutions, here’s how you can start to save electricity bill:
Use Energy-Efficient Appliances
One of the best ways to lower electricity usage is by replacing older, energy-draining appliances with more energy-efficient models. Look for appliances with A+ or higher rating of the South African Energy Efficiency Label (SAEEL), which indicates they meet high standards for energy savings. This applies to everything from fridges and washing machines to light bulbs (opt for LEDs instead of incandescent bulbs).
Insulate Your Home or Business
Keeping your home or business cool in summer and warm in winter can take a huge chunk of your energy bill. Invest in insulation to reduce the need for heating and cooling. Adding weather stripping around doors and windows can also keep the temperature stable, making your HVAC system work less.
Invest in Solar Power Solutions
If you’re looking for a practical and eco-friendly way to reduce your electricity costs in the long run, solar power is one of the most effective solutions. By installing a solar generator system, you can produce your own electricity and store it for use at night or during load shedding events.
One such solution is the EcoFlow DELTA 2 Solar Generator, which combines EcoFlow portable solar panels and the EcoFlow DELTA 2 Portable Power Station for a comprehensive, sustainable energy solution.
The EcoFlow DELTA 2 offers a solid starting capacity of 1,024 Wh, enough to keep your essential devices powered for hours. Need more? You can easily add an extra DELTA 2 battery to boost capacity to 2,048Wh or opt for the DELTA Max Extra Battery to hit an impressive 3,040Wh. This makes it perfect for home backup or running everyday appliances, especially during power outages.
With its 1,800W running AC output, the DELTA 2 power station can power over 90% of home appliances, including your microwave, fridge, coffee maker, and more. Plus, it can handle up to 13 devices at once, perfect for family gatherings or work-from-home setups. Thanks to X-Boost technology, it can even manage devices with a high wattage draw up to 2,400W, preventing overloading and ensuring reliability.
For a seamless home backup solution, the DELTA 2 integrates easily into your home’s electrical system. Using the EcoFlow Automatic Transfer Switch, it can switch from grid power to backup power in just 1-2 seconds, ensuring uninterrupted power supply during blackouts.
Pair it with EcoFlow’s solar panels, and you’ll be able to charge it in as little as 3-6 hours with a 400W panel or two 220W panels. Thanks to its MPPT (Maximum Power Point Tracking) technology, the DELTA 2 automatically optimizes power input to achieve charging efficiency greater than 98%.
With its LiFePO4 batterychemistry, it offers 3000+ full charge cycles, meaning you’ll get years of reliable use before the battery capacity drops below 80%. Plus, you can control the system remotely through the EcoFlow app, whether you’re at home with Wi-Fi or off the grid with Bluetooth, allowing you to monitor your power usage, adjust settings, and even control charging speed.
Unplug Devices When Not in Use
Many devices, even when turned off, continue to draw standby power. This “phantom power” can account for up to 10% of your electricity use. Simply unplugging electronics, such as chargers, TVs, and appliances, when not in use can reduce your consumption.
Practice Energy-Saving Habits
Sometimes, small changes in behaviour can lead to big savings:
- Turn off lights when you leave a room.
- Reduce your shower time.
- Turn your geyser down from 70˚C to 60˚C.
- Set your air conditioner to a higher temperature (around 23-24°C).
- In the office, encourage employees to turn off computers and printers at the end of the day.
Monitor Your Energy Usage
Keep track of your electricity consumption using tools like smart meters or energy management systems. These tools help you identify which appliances are consuming the most power and adjust accordingly. Apps that link to your prepaid meter can also give real-time insights into your energy use, helping you stay on top of your consumption.
Conclusion
The cost of electricity in Cape Town can feel overwhelming, but the more you know, the better equipped you’ll be to manage it. Whether you’re looking to cut down your monthly bill at home or reduce overheads for your business, knowing what influences the cost of electricity gives you the upper hand. By adopting energy-saving practices and investing in solar energy and home backup power supply, you can significantly lower your monthly bills and even contribute to the environment. So, take control of your electricity costs today and start saving!
FAQs
How much is Eskom electricity per unit?
Eskom’s electricity rates vary depending on your usage and the type of tariff you’re on. For most residential customers, the cost is between R2.00 and R4.50 per kWh, including VAT. The exact price depends on factors like your electricity consumption (in blocks), whether you’re on a standard or prepaid tariff, and if you’re supplied directly by Eskom or via your local municipality.
How can I monitor my electricity costs?
To monitor your electricity costs, regularly check your monthly bill or smart meter for detailed usage and charges. For prepaid meters, track your balance as you top up. If available, use energy management apps to monitor consumption and receive tips on saving.
Do people use more electricity in winter?
Yes, most households typically spend around 20% more on electricity during the winter months, primarily due to increased use of electric heating.