Why going off-grid is becoming more expensive for South African farms
As electricity tariffs increasingly include capacity and network-related charges, farmers must assess their full energy needs before investing in solar, batteries or off-grid systems.
South Africa’s energy debate has long focused on electricity availability and load-shedding. However, as the grid becomes more stable, the cost and structure of electricity tariffs are becoming increasingly important, according to RenEnergy.
Juandre Pitout, head of business development at RenEnergy, said electricity tariffs had risen significantly over time, with some increases exceeding inflation.
“For 2026/27 alone, Eskom direct customers are facing an average increase of 8.76%, while municipal bulk tariffs are increasing by 9.01%,” Pitout said.
Tariffs are changing
Pitout said the price per kilowatt-hour was no longer the only consideration for electricity users.
“The structure of electricity tariffs is also changing. Customers are increasingly paying separately for the energy they consume, the capacity they require and access to the network,” he said.
For farmers, this makes long-term energy-cost management increasingly important.
Pitout said the change did not necessarily mean every fixed charge was increasing faster than the headline tariff.
“What we are seeing is a structural shift towards recovering more of the cost of the electricity system through capacity and fixed components, rather than purely through the electricity a customer consumes,” he said.
Eskom has introduced a Generation Capacity Charge on tariffs including Ruraflex. The charge is calculated according to capacity, in rand per kVA per month.
For 2026/27, Eskom increased the phase-in of the charge from 20% to 30% of its proposed cost-reflective level, while adjusting energy charges to keep the overall tariff increase in line with the approved average.
“That distinction matters enormously,” Pitout said. “Traditionally, a customer might think that if they consume fewer kilowatt-hours, their bill should fall proportionately. Increasingly, that is not necessarily the case because part of the bill relates to having generation and network capacity available to you.
“For businesses considering solar, batteries or going off-grid, it is therefore not enough to look only at the saving per kilowatt-hour. You need to understand the entire tariff structure, your demand profile and the capacity you are paying for.”
Why farms face a different energy challenge
Pitout said moving off-grid was technically complex and required a detailed understanding of a farm’s electricity demand.
“The first thing we do is understand the load in detail. On a farm, that could mean irrigation pumps, refrigeration, packhouses, processing equipment, seasonal demand, overnight loads and the times of day when the biggest peaks occur,” he said.
RenEnergy then models how solar generation, battery storage and other generation sources would work together.
“But that is only part of it. You also need control systems to balance generation and demand in real time,” Pitout said.
He added that farmers also needed to consider redundancy, power quality, poor solar conditions, the start-up of large motors or pumps and the effect of a system component becoming unavailable.
“Engineering has to work as an integrated energy system, not as a collection of individual technologies,” he said.
For farmers, energy is directly linked to the cost of production.
“You cannot simply stop irrigating because electricity is expensive during a particular period. The crop dictates when water is required. Refrigeration has to run. Packhouses have to operate. Production has to continue,” Pitout said.
“That means farmers are particularly exposed to both the price of electricity and the way tariffs are structured.”
Long-term planning
Pitout said farmers made investment decisions over many years involving irrigation infrastructure, orchards, equipment, packhouses and expansion.
“Energy forms part of the economics of those investments. This is where having greater control over energy becomes valuable,” he said.
A properly designed renewable-energy system could reduce the amount of electricity purchased from the grid and use battery storage to shift consumption into more expensive periods.
“At the right scale, it could potentially allow the farm to operate independently from the grid altogether,” Pitout said.