Is solar cheaper than Eskom? A cost comparison


Research by Sustainable Energy Africa in 2019 found that financing solar PV (photovoltaic) with storage via a home loan can be cheaper than electricity from Eskom. The cost of solar PV panels decreases more than 10% each year. In contrast, Eskom increases prices at a similar rate. Within three years, residential solar systems might cost less than Eskom’s power.

By turning to solar, homeowners can fix their electricity costs for 20 years and avoid loadshedding worries. A solar PV with battery storage setup to go off-grid would typically cost around R200,000. Adding a solar geyser and gas oven might incur an extra R30,000. Various financing options, including bank loans and power purchase agreements (PPAs), enhance the affordability of solar.

Key takeaways

  • Solar PV plus storage financed through a home loan can be cheaper than buying electricity from Eskom.
  • The cost of solar PV panels has been decreasing while Eskom tariffs continue to rise.
  • Within the next few years, residential solar PV and battery storage systems are expected to be more cost-effective than grid power from Eskom.
  • Switching to solar energy offers a fixed electricity price for 20 years and protection against loadshedding.
  • Financing options such as bank loans and power purchase agreements (PPAs) can make solar more affordable for homeowners.

The cost of solar installation and Eskom’s pricing structure

Exploring solar installation costs in South Africa unveils a dual perspective. It requires delving into the initial expenses and the sustained returns. Initial setup for a home system typically costs between R70,000 to R200,000. These figures, though daunting, can easily be overshadowed by notable future electricity bill reductions.

Furthermore, solar systems incur minimal maintenance outlays and can function for about two decades. They form a reliable long-term, eco-friendly energy option. In contrast, Eskom’s electricity charges are on a persistent rise. This escalation is driven by mounting operational expenses, financial liabilities, and market dynamics.

Solar power’s allure lies in its promise to stabilise both cost and supply security. It mitigates the risks posed by sporadic load-shedding and increasing Eskom rates. For homeowners, this approach ensures fiscal predictability and reinforces autonomy over their energy usage.

Additionally, various finance schemes, like lease with an option to buy and power procurement deals, facilitate affordable solar adoption. Such plans allow for the gradual spreading of the upfront investment. They also permit securing solar energy at a fixed, often competitive, price. Notably, this strategy can lead to sizeable reductions in Eskom-related expenses, further cutting down on the overall energy budget.

Opting for solar energy bears manifold benefits. It secures advantages common to renewable sources while curtailing personal greenhouse gas emissions. In effect, it fosters a greener, more sustainable tomorrow. Besides, solar power stands as a dependable, cost-effective alternative to Eskom, championing thrift and clean energy use.

The future of solar energy and the role of government policies

As the cost of solar power decreases, it stands out as a viable option against Eskom’s rising tariffs. Homeowners in South Africa choosing solar can save a lot over time and support green energy. The government is backing solar and other renewables, creating policies to foster their growth.

Solar energy doesn’t get as many subsidies as fossil fuels, but policies like feed-in tariffs offset this. These mechanisms ensure payment for extra power sent to the grid. They motivate people to install solar panels and boost the renewable energy market in the country.

Solar energy offers more than just financial benefits. It’s clean, emitting no carbon, unlike coal-based electricity. Choosing solar helps homeowners lower their environmental impact and fight climate change.

Additionally, the solar industry spurs innovation and job opportunities. Its expansion encourages the development of new technologies. This includes advancements in making hydrogen, which could lower the need for certain imports in South Africa. Moreover, it might lead to the production of eco-friendly fuels and chemicals for international trade.


FAQ: Is solar energy cheaper than Eskom?

Is solar energy cheaper than Eskom?

Research by Sustainable Energy Africa shows that solar PV plus storage can outprice electricity from Eskom. Solar panel prices are decreasing at a rate of more than 10% annually. Meanwhile, Eskom is increasing its tariffs. It’s expected that within the next three years, the overall cost of solar systems will dip below that of Eskom’s.

What is the cost of solar installation compared to Eskom’s pricing structure?

Initial solar setup costs in South Africa vary from R70,000 to R200,000 for a residential system. These upfront costs are balanced by long-term savings. Solar installations require little upkeep and often last 20 years. In comparison, Eskom’s rates are climbing due to various factors.

What are the advantages of solar energy compared to Eskom?

Solar power provides steady pricing and supply, circumventing the uncertainties of load-shedding. Homeowners who switch to solar can have a stable electricity rate for two decades, escaping loadshedding. This change is supported by financing choices like bank loans and PPAs, making solar financially appealing. Besides the monetary advantages, solar is cleaner and reduces negative environmental impacts linked to coal-powered electricity.

What is the future of solar energy in relation to government policies?

The South African government shows dedication to fostering renewable energy, including solar. While solar isn’t subsidised as much as fossil fuels, support mechanisms are in place, like feed-in tariffs for surplus energy. Future projections suggest solar costs will continue to fall, while Eskom’s rates may not. Opting for solar could prove significantly more cost-effective for homeowners.

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