Using electricity tariffs to your advantage

Have you ever studied your electricity tariff? Did you know that the more you use the more you pay? Yes – quite opposite to other purchases you make, you don’t get a discount, but you pay a penalty for higher usage. May sound sneaky at first, but in fact it is a good thing - you get rewarded for reducing your energy consumption, this is what we strive for to help the environment, right? It pays double to be energy efficient and environmentally friendly – firstly you don’t pay for what you don’t use, and secondly you pay a lower rate for what you do still use.

Example – residential tariff City of Tshwane

(as of July 2018) - excl. VAT

Block 1: 0 – 100 KWH R 1.4178 per KWH

Block 2: 101 – 400 KWH R 1.6592 per KWH

Block 3: 401 – 650 KWH R 1.8077 per KWH

Block 4: > 650 KWH R 1.9488 per KWH

So let’s say you use 730 KWH (Kilo Watt Hours) per month, you will pay 100 KWH in Block 1, 300 KWH in Block 2, 250 KWH in Block 3 and the remainder in Block 4. This will equate to R 1,434.47 incl. VAT.

Now let’s say you change 10 old-fashioned light bulbs, which use 60W each, to LED bulbs, which use 5W each. You save 550W (60W x 10 – 5W x 10).

If your light bulbs are on for 5 hours per day x 30 days a month, this is 150 hours x 550W = 82.5 KWH total saving.

Voila – your consumption has dropped from 730 KWH to 647.5 KWH that month, you have eliminated the highest bracket of R 1.9488+VAT (=R 2.2411). So instead of R 1,434.47 you pay now R 1,249.99. A whopping saving of R 184.49 per month, which is nearly 13% of your monthly bill, achieved by just changing 10 bulbs !!!

Bottom line: you get a couple of LED globes for R 184.49 per month, do not wait till your old ones blow, go now and change them, help the planet and your pocket. Just make sure you dispose of your old globes as E-waste - important !

The above example serves to illustrate that you can use your tariff information to maximise savings. It is advisable to implement more energy saving measures, e.g. a geyser controller saves a lot, and sometimes even just behaviour change is enough, such as switching off unnecessary lights, only boil enough water in your kettle for the cup of coffee you want to make, don’t run your pool pump excessively long etc. etc. These are all low cost or no cost interventions which can save a lot every month. Any saving in consumption comes off the highest rate on the sliding scale. In the wake of the recently announced tariff increase of just below 14% this is even more rewarding.

Not all residential tariffs work the same way, but all of them have a sliding scale and the principle of being rewarded for lower usage applies to all of them. Check out your electricity bill and study the small print, usually you find this information on the second page.

Business and Industrial tariffs

When we look at business and industrial tariffs, it gets a lot more complicated but also interesting. These tariffs usually include a demand charge in KVA, which is measured in half-hourly intervals and the highest measurement per month gets billed for the whole month. Again, this is not Eskom being nasty, this is Eskom having to provide for this maximum demand in case you want to use it, and that needs to be paid for. There are a number of measures a company can put in place to reduce their peak demand, please contact us if you would like help with it.