The Cost Of Standing Still: Why Waiting For Cheaper Energy Is An Expensive Decision

That’s the best move for your business, right?

While it might sound perfectly reasonable, the problem is that South Africa’s electricity market isn’t standing still while you stall. The way businesses pay for electricity is changing, grid capacity remains a serious constraint and electricity costs continue to rise. So while there may be an opportunity for a better deal tomorrow, businesses also need to consider what they could be giving up today if they choose to delay.

The electricity bill is changing
Historically, businesses have equated their electricity bill with the energy they consume. In future, your bill will increasingly reflect more than just the number of kilowatt-hours consumed, with businesses paying significantly more for the capacity and infrastructure required to deliver that electricity.

Since April 2025, Eskom has begun restructuring applicable tariffs to separate energy costs more clearly from other components, including legacy and Generation Capacity Charges (GCC). The GCC is being phased in over three years, with the fixed portion increasing from 20% of Eskom’s originally proposed Retail Tariff Plan value in 2025/26 to 30% in 2026/27. This comes as Eskom direct tariffs increased by 8.76% this year, following a 12.74% increase in 2025/26.

The principle behind the new structure is better cost reflectivity. Consider that the cost of generating electricity is only one aspect making up the number on your bill; it still has to travel long distances through transmission and distribution networks before reaching a factory, office or shopping centre. These networks also have to be built, maintained and often expanded, which contributes roughly a third of Eskom’s total operating costs.

This means that in the not-too-distant future,  you will be paying more for access to the grid, not just the energy that flows through it.

The cost of waiting
Keeping your energy strategy unchanged is a bit like putting off investment in R&D because your existing products are performing well. Your competitors forge ahead and keep innovating, and by the time you realise how far the market has moved ahead, catching up becomes much harder.  While you wait on proposals, competitors with reduced energy costs have the opportunity to reinvest those savings elsewhere in their businesses.

Businesses that secure lower-cost energy earlier can start banking those savings now, while also benefiting from the reduced carbon intensity of their operations. Even if renewable energy may cost slightly less two years from now, the future savings still have to compensate for what could have been saved during those two years and, in almost all cases, the gap will never be recovered.

There is another important consideration for businesses in South Africa: access to renewable energy isn’t unlimited.

Historically, much of the country’s power was generated around Mpumalanga and transported to major load centres. Today, significant renewable generation is being developed in areas with strong solar and wind resources, such as the Northern Cape, placing new demands on transmission infrastructure that was not originally designed to carry this much power from these locations.

Think of the grid as a pipe; it can only carry so much at a time, and adding more renewable generation doesn’t automatically make that pipe bigger. New projects need grid access, while expanding transmission infrastructure requires significant investment and takes time. Therefore, waiting for renewable energy to become cheaper assumes that suitable supply and grid capacity will be available when you eventually want it – which isn’t necessarily a given.

There is no one-size-fits-all solution
Some businesses may not have enough physical space to accommodate sufficient solar panels, while others may not want to make a long-term commitment to premises they could leave in five or ten years. By allowing businesses to choose where their energy comes from while still paying a fair share for the network that delivers it, wheeling provides access to renewable electricity without long contract terms or site-specific constraints. By comparison, solar generated on-site doesn’t need to travel hundreds of kilometres through transmission and distribution networks, which can make the potential saving on each kilowatt-hour greater.

This is why a business’ energy strategy needs to start with its own needs and goals. The most resilient energy strategy isn’t about replacing the grid, but rather building a portfolio of energy solutions that work together to manage cost, reliability and risk. For one business, that might mean maximising on-site solar and using batteries to shift consumption away from expensive periods; for another, wheeling may provide the flexibility and scale it needs. For many, the value will be driven by a combination of energy options designed around how that specific business operates.