Sean Moolman - PowerOptimal - the Future of Energy

Solar PV vs solar thermal vs heat pumps: Which is best for water heating?

by Sean Moolman

2

South Africans have been pummelled by large electricity price increases since electricity shortages and load shedding started in 2008. Electricity prices increased by more than 600% in real money terms over this period – in other words, 6 times more than inflation (see our blog article on this topic).

This rapid and sustained rise in electricity prices, combined with increasing concern about the health and environmental impacts of South Africa’s ‘dirty’ coal-fired electricity, has prompted a search for ways to reduce our dependence on the grid.

Water heating is the single biggest energy consumer in South African households at 40% of total household energy use (ref). That makes it an obvious target for reducing the electricity bill.

South Africa’s National Building Regulations also prescribes minimum energy efficiency standards (through Regulation XA), which requires all new residential properties to derive at least 50% of the annual household water heating requirement from an energy source other than grid electricity.

There are many options for heating water, including:

Solar PV (photovoltaic)
Solar thermal (also called ‘solar geysers’)
Heat pumps
Natural gas or LPG
Biomass
PVT (PV thermal – a combination of solar PV and solar thermal)

With so many options for water heating, the inevitable question is: which is best?

Like most things in life, the answer depends on your priorities and circumstances. Things like location & climate, size of household, budget, reliability of electricity supply and importance of environmental considerations all have an impact on the suitability of available water heating options.

However, there are clear advantages to some options over others. Let’s first look at cost.

When considering the cost of any system, it is important to also consider total lifetime cost. This includes the upfront cost of the system and installation (capital cost), as well as any ongoing costs, such as electricity or fuel costs, maintenance and repair costs. One must also consider the lifetime of the system.

There is a methodology to account for all the above factors called Levelized Cost of Energy (LCOE). It calculates the total cost per unit of energy (called a kWh or ‘kilowatt-hour’) for different energy options.

The graph below shows the overall cost or LCOE for several water heating options in South Africa as of 2024 (see tab “Levelized Cost of Energy” at ref):

It is clear from the above graph that solar PV and solar thermal water heating are by far the lowest cost options for heating water. The most expensive option is in fact electricity from Eskom or the municipality!

Heat pumps require maintenance and have ongoing electricity costs, while gas is expensive and fluctuates with changes in oil price.

Of course, there are several other considerations when deciding between different water heating options.

The table below compares some of these factors for the three most common alternative water heating options: solar PV, solar thermal and heat pumps.

Factor	Solar PV	Solar Thermal	Heat Pumps
Additional plumbing required?	No	Yes	Yes
Retrofit to standard electric geysers?	Yes	Some designs can be retrofitted	Requires modifications
Noise?	No noise	Some noise (pumped systems)	Yes
Works during power failures?	Yes	Yes for some (thermosiphon & pumped with solar PV)	No
Frost issues?	No	Yes (requires more expensive indirect system)	Reduced performance
Winter performance	Good	Not as good	Not as good
Overheating & water wastage?	No	Yes (stresses system & wastes water)	No
Aesthetics	Good	Not good for thermosiphon & requires stronger roof	Good (if hidden)
Maintenance required?	No	Yes – every few years	Yes – annual
Price	Comparable or less expensive than pumped solar thermal. Less expensive than heat pumps	Thermosiphon solar thermal systems are cheapest	Most expensive
Lifetime	30+ years	10 – 15 years	10 – 15 years
Roof space required	2 – 3 x more than solar thermal	2 – 4 m²	None (but requires space for system)
Lifetime cost of energy	Best	Good	Worst (continue paying for electricity)
Section 12B tax benefit for ‘build to rent’ property developers?	Yes	No	No

Based on cost and all the considerations in the above table, solar PV and solar thermal are clearly preferable to heat pumps. (There are some situations where heat pumps are the only practical option – for example multi-storey buildings with insufficient roof space for solar PV – although carports or other ground mounted solar PV can help overcome this issue).

If upfront cost is the overriding consideration, thermosiphon systems (the systems with the tank on the roof) are the lowest initial cost option. However, when system lifetime and maintenance cost are included in the calculations (in other words, when looking at lifetime cost), solar PV is the most cost effective.

When considering factors such as winter performance, noise, power failures, maintenance requirements, overheating and water wastage, solar PV is preferable to solar thermal.

Whichever option you prefer, it has never made more financial and environmental sense than now to switch to alternative ways of heating water!

Photo of faucets by Dan Smedley on Unsplash

2024 update: What does a shower cost in South Africa?

21Jan

by Sean Moolman

0

With the rapid increases in the price of electricity and water over the past decade, the question is: what does a shower or bath cost in South Africa in 2024?

Most South Africans are aware of the rapidly rising price of electricity (a 650% increase over the period 2007-2022), but the price of water has also been increasing rapidly over the same period.

In fact, the scale of the water price increases matches that of electricity. (For the full story, see our blog post The Price of Water and Electricity in South Africa: A Tale of Two Tragedies.)

South Africans tend not to think twice about the cost of a shower or bath, since both electricity and water used to be very inexpensive.

Is this still true in 2024? Our previous studies in 2022 and earlier were real eye-openers, with the cost of a 10-minute shower using a 15 litre/min showerhead coming to just over R21/shower!

We have now updated the study using the latest approved municipal tariffs for the tariff year July 2023 to June 2024. As you might guess, things look worse than they did last year.

Here is the summary data for 2023 to 2024.

For an average middle-class household in South Africa (LSM7-10), a 10-min shower costs over R22 if you have a ‘standard’ 15 litre/min showerhead! This is about R2.21/min. By changing to a low-flow showerhead and reducing shower time to 6 minutes, you can dramatically reduce this to about R7.09 per shower (or R1.18/min).

In either case, it appears that the days of ‘cheap’ showers are numbered, and we can all do with being more aware of just how much water & electricity we use in the shower or bath.

Conventional wisdom has it that showering uses less water than running a bath. However, a typical bath uses 90 litres of water, so if you shower for longer than 6 minutes with a ‘standard’ showerhead, you will actually use more water than if you had a bath… With an average shower time internationally of 8 minutes, a shallow bath might actually be better for your pocket and the environment!

Of course, even better than a shallow bath is to switch to a low flow showerhead and have shorter showers… During the ‘Day Zero’ water crisis, City of Cape Town recommended showering for less than 2 minutes, and switching to low-flow showerheads (less than 10 litres/min) is compulsory according to City of Cape Town bylaws.

The graphs below show more detailed information on water & energy use and cost per shower for normal & low-flow showerheads, and compared to a ‘standard’ 90 litre bath.

Photo of shower head by Ginger Hendee on Unsplash.

References, methodology & assumptions for calculations

Shower & bath temperature of 40°C. See e.g. Lawrence JC & Bull JP. 1976. Thermal conditions which cause skin burns. Engineering in Medicine 5(3):61-63.
Average residential water consumption data was obtained from: Viljoen N. 2016. Presentation: City of Cape Town Residential Water Consumption Trend Analysis 2014/15. Last accessed: 21/08/2017.
Average residential electricity consumption data was obtained from: Goliger, A. and Cassim, A. (14 and 15 July 2017). Tipping Points: The Impacts of Rising Electricity Tariffs on Households and Household Electricity Demand. 3rd Annual Competition and Economic Regulation (ACER) 2017 Conference, Dar es Salaam, Tanzania. Last accessed: 21/08/2017.
Average bath uses about 90 litres of water. Waterwise. Last accessed: 12/09/2017.
“Normal” or standard showerheads use 15 litres of water per minute or more, and low flow showerheads use about 8 litres water per minute. Eskom fact sheet on showerheads. Last accessed: 12/09/2017.
Average effective residential water & electricity tariffs were calculated from the published 2023/24 tariffs of the following four metropolitan municipalities: City of Johannesburg, City of Tshwane, City of Cape Town and Ethekwini, using the average residential water and electricity consumption values for LSM7-10 obtained from the above references.
For ‘lower income’ households, the average marginal water tariff is somewhat lower across the four municipalities (due to lower average consumption), at R3.18/kWh for electricity and R43.74/kilolitre for water & sanitation. This yields a cost per bath of R12.23, a cost per 10-minute ‘normal showerhead’ shower of R20.38/shower, and a cost per 6-minute low-flow showerhead shower of R6.52/shower.
Energy cost of hot water based on heating water from 15 to 60°C, which requires approximately 5.22 kWh per 100 litre.
A study by the Alliance for Water Efficiency also found a shallow bath to be better than a long shower with a high flow showerhead.
Average shower time: a recent study at a South African university found an average shower time of over 9 minutes.

2022 update: What does a shower cost in South Africa?

20Oct

by Sean Moolman

0

With the rapid increases in the price of electricity and water over the past decade, the question is: what does a shower or bath cost in South Africa in 2022?

Most South Africans are aware of the rapidly rising price of electricity (a 650% increase over the period 2007-2022), but the price of water has also been increasing rapidly over the same period.

In fact, the scale of the water price increases matches that of electricity. (For the full story, see our blog post The Price of Water and Electricity in South Africa: A Tale of Two Tragedies.)

South Africans tend not to think twice about the cost of a shower or bath, since both electricity and water used to be very inexpensive.

Is this still true in 2022? Our previous study in 2021 was a real eye-opener, with the cost of a 10-minute shower using a 15 litre/min showerhead coming to just under R20/shower!

We have now updated the study using the latest approved municipal tariffs for the tariff year July 2022 to June 2023. As you might guess, things look worse than they did last year.

Here is the summary data for 2022 to 2023.

For an average middle-class household in South Africa (LSM7-10), a 10-min shower costs over R21 if you have a ‘standard’ 15 litre/min showerhead! This is about R2.10/min. By changing to a low-flow showerhead and reducing shower time to 6 minutes, you can dramatically reduce this to about R6.70 per shower (or R1.12/min).

In either case, it appears that the days of ‘cheap’ showers are numbered, and we can all do with being more aware of just how much water & electricity we use in the shower or bath.

Conventional wisdom has it that showering uses less water than running a bath. However, a typical bath uses 90 litres of water, so if you shower for longer than 6 minutes with a ‘standard’ showerhead, you will actually use more water than if you had a bath… With an average shower time internationally of 8 minutes, a shallow bath might actually be better for your pocket and the environment!

Of course, even better than a shallow bath is to switch to a low flow showerhead and have shorter showers… City of Cape Town recommends showering for less than 2 minutes, and switching to low-flow showerheads (less than 10 litres/min) is compulsory according to City of Cape Town bylaws.

The graphs below show more detailed information on water & energy use and cost per shower for normal & low-flow showerheads, and compared to a ‘standard’ 90 litre bath.

Photo of shower head by Ginger Hendee on Unsplash.

References, methodology & assumptions for calculations

Shower & bath temperature of 40°C. See e.g. Lawrence JC & Bull JP. 1976. Thermal conditions which cause skin burns. Engineering in Medicine 5(3):61-63.
Average residential water consumption data was obtained from: Viljoen N. 2016. Presentation: City of Cape Town Residential Water Consumption Trend Analysis 2014/15. Last accessed: 21/08/2017.
Average residential electricity consumption data was obtained from: Goliger, A. and Cassim, A. (14 and 15 July 2017). Tipping Points: The Impacts of Rising Electricity Tariffs on Households and Household Electricity Demand. 3rd Annual Competition and Economic Regulation (ACER) 2017 Conference, Dar es Salaam, Tanzania. Last accessed: 21/08/2017.
Average bath uses about 90 litres of water. Waterwise. Last accessed: 12/09/2017.
“Normal” or standard showerheads use 15 litres of water per minute or more, and low flow showerheads use about 8 litres water per minute. Eskom fact sheet on showerheads. Last accessed: 12/09/2017.
Average effective residential water & electricity tariffs were calculated from the published 2022/23 tariffs of the following four metropolitan municipalities: City of Johannesburg, City of Tshwane, City of Cape Town and Ethekwini, using the average residential water and electricity consumption values for LSM7-10 obtained from the above references.
For ‘lower income’ households, the average water & electricity tariffs are somewhat lower across the four municipalities (due to lower average consumption), at R2.57/kWh for electricity and R45.30/kilolitre for water & sanitation. This yields a cost per bath of R10.78, a cost per 10-minute ‘normal showerhead’ shower of R17.97/shower, and a cost per 6-minute low-flow showerhead shower of R5.75/shower.
Energy cost of hot water based on heating water from 15 to 60°C, which requires approximately 5.22 kWh per 100 litre.
A study by the Alliance for Water Efficiency also found a shallow bath to be better than a long shower with a high flow showerhead.
Average shower time: a recent study at a South African university found an average shower time of over 9 minutes.

2021 update: What does a shower cost in South Africa?

15Aug

by Sean Moolman

0

With the rapid increases in the price of electricity and water over the past decade, the question is: what does a shower or bath cost in South Africa in 2021?

Most South Africans are aware of the rapidly rising price of electricity (a 650% increase over the period 2007-2022), but the price of water has also been increasing rapidly over the same period.

In fact, the scale of the water price increases match that of electricity. (For the full story, see our blog post The Price of Water and Electricity in South Africa: A Tale of Two Tragedies.)

South Africans tend not to think twice about the cost of a shower or bath, since both electricity and water used to be very inexpensive.

Is this still true in 2021? Our previous study in 2017 was a real eye-opener, with the cost of a 10-minute shower using a 15 litre/min showerhead coming to just under R13/shower.

We have now updated the study using the latest approved municipal tariffs for the tariff year July 2021 to June 2022. Unfortunately things have only gotten worse…

Here is the summary data for 2021.

For an average middle-class household in South Africa (LSM7-10), a 10-min shower costs almost R20 if you have a ‘standard’ 15 litre/min showerhead! This is about R1.95/min. By changing to a low-flow showerhead and reducing shower time to 6 minutes, you can dramatically reduce this to just over R6 per shower (or R1.04/min).

In either case, it appears that the days of ‘cheap’ showers are numbered, and we can all do with being more aware of just how much water & electricity we use in the shower or bath.

Conventional wisdom has it that showering uses less water than running a bath. However, a typical bath uses 90 litres of water, so if you shower for longer than 6 minutes with a ‘standard’ showerhead, you will actually use more water than if you had a bath… With an average shower time internationally of 8 minutes, a shallow bath might actually be better for your pocket and the environment!

Of course, even better than a shallow bath is to switch to a low flow showerhead and have shorter showers… City of Cape Town recommends showering for less than 2 minutes, and switching to low-flow showerheads (less than 10 litres/min) is compulsory according to City of Cape Town bylaws.

The graphs below show more detailed information on water & energy use and cost per shower for normal & low-flow showerheads, and compared to a ‘standard’ 90 litre bath.

Photo of shower head by Nicole-Koehler on Wikimedia Commons. Photo was edited and is used under the CC-BY-SA-3.0 license.

References, methodology & assumptions for calculations

Shower & bath temperature of 40°C. See e.g. Lawrence JC & Bull JP. 1976. Thermal conditions which cause skin burns. Engineering in Medicine 5(3):61-63.
Average residential water consumption data was obtained from: Viljoen N. 2016. Presentation: City of Cape Town Residential Water Consumption Trend Analysis 2014/15. Last accessed: 21/08/2017.
Average residential electricity consumption data was obtained from: Goliger, A. and Cassim, A. (14 and 15 July 2017). Tipping Points: The Impacts of Rising Electricity Tariffs on Households and Household Electricity Demand. 3rd Annual Competition and Economic Regulation (ACER) 2017 Conference, Dar es Salaam, Tanzania. Last accessed: 21/08/2017.
Average bath uses about 90 litres of water. Waterwise. Last accessed: 12/09/2017.
“Normal” or standard showerheads use 15 litres of water per minute or more, and low flow showerheads use about 8 litres water per minute. Eskom fact sheet on showerheads. Last accessed: 12/09/2017.
Average effective residential water & electricity tariffs were calculated from the published 2021/22 tariffs of the following four metropolitan municipalities: City of Johannesburg, City of Tshwane, City of Cape Town and Ethekwini, using the average residential water and electricity consumption values for LSM7-10 obtained from the above references.
For ‘lower income’ households, the average water & electricity tariffs are somewhat lower across the four municipalities (due to lower average consumption), at R2.37/kWh for electricity and R37.88/kilolitre for water & sanitation. This yields a cost per bath of R9.59, a cost per 10-minute ‘normal showerhead’ shower of R15.98/shower, and a cost per 6-minute low-flow showerhead shower of R5.11/shower.
Energy cost of hot water based on heating water from 15 to 60°C, which requires approximately 5.22 kWh per 100 litre.
A study by the Alliance for Water Efficiency also found a shallow bath to be better than a long shower with a high flow showerhead.
Average shower time: a recent study at a South African university found an average shower time of over 9 minutes.

2022 update: Eskom tariff increases vs inflation since 1988 (with projections to 2024)

01Aug

by Sean Moolman

2

In 2015, 2017 and 2019 we published infographics showing Eskom annual tariff increases since 1988 compared to inflation.

Following Eskom’s court order success against NERSA in early 2021, it increased electricity prices by an average of 15.63% in April 2021. In April 2022, a further increase of 9.61% was approved. So what do the numbers look like today?

The graph below shows the Eskom tariffs from 1988 to 2022, plotted against CPI (Consumer Price Index) or inflation over the same period. It also shows projections up to 2024, based on expert forecasts and inflation projections.

Note: The graph depicts overall average increases – actual increases will be different for different types of consumers (residential, commercial and industrial) and will vary between municipalities.

Looking at the graph, the following can be noted:

In the period from 1988 up to the 2008 electricity crisis, electricity tariff increases did not keep tread with inflation. This was partly due to government policy to keep electricity tariffs as low as possible for poor communities, but also due to Eskom having an oversupply of electricity (in the 1990’s) and not investing in new capacity (in the 2000’s).
Between 1988 and 2007, electricity tariffs increased by 223%, whilst inflation over this period was 335%.
From the 2008 electricity crisis onwards, there is a clear and sharp inflection point for electricity tariffs in South Africa. From 2007 to 2022, electricity tariffs increased by 653%, whilst inflation over this period was 129%. Thus, electricity tariffs increased four-fold (or quadrupled) in real money terms in 14 years.

Considering the current serious state of Eskom’s debt and the fact that the country probably cannot afford for Eskom to fail, consumers can likely expect a continuance of much higher than inflation electricity price increases over the next several years.

In fact, Eskom has already applied to NERSA for a 32% tariff increase in April 2023. It has also applied to NERSA to restructure residential tariffs to ‘reflect cost drivers more accurately’. The restructured tariffs will see two main options for direct Eskom customers – Homepower and Homeflex.

For the Homepower tariff, the grid connection fee would increase from R218/month to R938/month – this is the charge before you have used a single kWh of electricity!

The Homeflex tariff will introduce time-of-use charges – in other words, the price of electricity will change depending on the time of day. (Time-of-use charges is widespread internationally, and helps to balance grid load by incentivising electricity use outside of peak hours.)

Eskom is in serious need of restructuring – which the government at last acknowledged and announced in 2019. As of October 2022 this restructuring has not yet been completed, but is in progress.

Sources:

Eskom warned its pricing itself out of the market. Website: https://techcentral.co.za/eskom-warned-its-pricing-itself-out-of-the-market/105167/. Last accessed: 2021/07/30.
Eskom tariffs and charges. Website: https://www.eskom.co.za/CustomerCare/TariffsAndCharges/Pages/Tariffs_And_Charges.aspx. Last accessed: 2022/10/20.
Stats SA. CPI History. Website: http://www.statssa.gov.za/publications/P0141/CPIHistory.pdf?. Last accessed: 2019/10/01.
Bureau for Economic Research. Inflation Expectations – History (2021). Website: https://www.ber.ac.za/BER%20Documents/Inflation-Expectations/?doctypeid=1065. Last accessed: 2021/07/30.
South Africa Inflation Expectations. Website: https://tradingeconomics.com/south-africa/inflation-expectations. Last accessed: 2022/10/20.

Image of Lethabo power station by Simisa on Wikimedia Commons [CC BY-SA 3.0]

The Price of Water and Electricity in South Africa: A Tale of Two Tragedies

18Jan

by Sean Moolman

2

Authors: Matthew Capes, Sean Moolman

Background

This article seeks to examine the price and affordability of water and electricity in South Africa. We embark on a tough but important journey to shed light on how the price of electricity and water has changed over the last 25 years, and how these basic needs have become less affordable for us, the citizens of South Africa.

On this journey, we discuss the following topics in 5 short chapters (click the link to go directly to a specific chapter):

The increase in Eskom’s average electricity tariff vs. inflation (CPI) – click here to read
The increase in the average municipal water and sanitation tariff for three different income levels vs. inflation (CPI) – click here to read
The contrast between the increases in South African electricity and water tariffs vs. inflation (CPI) – click here to read
How South Africans’ monthly electricity and water bills have changed in the past 25 years in both nominal and current money – click here to read
The combined electricity and water bill of an average South African household vs. average household disposable income in South Africa – click here to read

Each of the above topics is accompanied by a graph to aid the discussion and illustrate the seriousness of the situation in South Africa.

We hope to highlight the pertinence of wise water usage and efficient energy consumption and to stimulate the conversation surrounding what we could and should do to ensure sustainable and affordable access to these basic needs for all South African citizens.

For methods, assumptions and references, click here.

Chapter 1. Eskom average tariff vs. inflation (CPI)

The state of South Africa’s electricity provider, Eskom, is no secret. Plagued by ageing infrastructure, mismanagement, corruption, shrinking or stagnant revenues and increasing debt, the state-owned utility is caught in what is known as a ‘death spiral’.

The impact of these issues manifests in two ways. The first is known as load-shedding, something with which we as South Africans have become all too familiar. The second is the infamous Eskom electricity tariff increases. Ideally these tariff increases would be somewhat in line with increases in inflation… Oh what a perfect world that would be!

In sunny South Africa, electricity tariffs have increased by 512% from 2007 to 2020 (see the graph). That is 5 times faster than inflation! Eishkom?

To top it all off, Eskom was recently granted a R13 billion clawback by NERSA, as well as an additional R69 billion clawback, resulting from a court judgement in Eskom’s favour[a].

What does that mean for us? We, the citizens of South Africa, are set to experience further rapid electricity bill escalations over the next few years. It goes without saying that those increases will not be accompanied by improved service delivery.

Speaking of rapid escalations, has anyone kept an eye on their water bill? In the next chapter we take a closer look at municipal water tariffs.

Chapter 2. Average municipal water & sanitation tariff vs. inflation (CPI)

In the previous chapter we discussed the 512% increase in the average Eskom electricity tariff since 2007. We shall now embark on the 2nd leg of our journey in which we highlight an equally odious development in a tariff that has received a lot less negative press: Water and sanitation.

You are not alone if you allowed the increasing cost of your most basic need to go unnoticed…

Perhaps now is the time to explore the real water tariff trends, overshadowed by Eskom’s conspicuous plight and camouflaged by a complicated tariff structure, but which impacts our daily lives as South African citizens. Think back to ‘Day Zero’ in 2018 and the questions surrounding a lack of access to water and water insecurity in South Africa.

Now ask yourself this: Is it possible that the cost of the water provided by municipalities has increased faster than inflation, considering the deteriorating service delivery on a broader scale?

As can be seen in the graph, average municipal water tariffs have increased four times faster than inflation since 1996.

Essentially, the average municipal water tariff was almost 1300% higher in 2020 than in 1996… Unfortunately, we must bear this burden together with that of Eskom’s runaway tariffs.

In the next chapter, we compare electricity and water & sanitation tariffs over the past 25 years and consider why the increases in average municipal water tariffs have gone largely unnoticed.

Chapter 3. South African electricity and water tariffs vs. inflation (CPI)

In the previous chapter, we highlighted the dizzying increases in average municipal water tariffs since 1996. The numbers are startling to say the least, which begs us to ask: how could such exorbitant increases happen right under our noses without a public outcry?

The bulk of negative public attention and sentiment has been aimed at Eskom… Rightfully so, however, it may have distracted us from an equally pressing issue.

Water tariffs (1270%) have increased even faster than electricity tariffs (1120%) over the past 25 years (1996 to 2020).

But we have an excuse for our ignorance, for these staggering municipal water tariff increases are cloaked by more than Eskom’s shadow.

To begin with, our water tariffs appear as only one component in a larger municipal bill and are thus hidden in the details. Furthermore, every municipality sets its own water tariffs and structures them in a more complicated way than residential electricity tariffs. This tariff structure is known as block tariffs, where the price per unit of water increases in blocks as usage increases.

Consequently, it is more difficult for people to make direct comparisons and to know the real cost of each unit of water.

Our journey to unearth the truth would be incomplete without investigating the real monetary impact of these increases. How has the price of water and electricity changed over the past 25 years in current money terms? In the next chapter, we illustrate and discuss how these increases have affected our monthly electricity and water bills in both nominal and current money.

Chapter 4. South African monthly electricity and water bills 1996 to 2021 (nominal and current money)

Electricity and water tariff trends in South Africa were explored in the previous articles in this series. But this would be rather meaningless without highlighting how this translates into the monthly electricity and water bills of the average South African.

What was the monthly water and electricity bill 25 years ago compared to what we are paying today?

Not accounting for inflation, the average monthly electricity and water bill for lower to middle income families was a mere total of R161 in 1996. Fast forward to 2020 and this average monthly electricity and water bill has ballooned to R2 028!

The question you should now be asking is: “how much of that increase was due to inflation”?

As I am sure you would have guessed, the answer is not much. The next graph tells the story.

Essentially, this graph tells us that in 1996 the average electricity and water bill was R638 in today’s money. A stark contrast to the R2 028 average monthly electricity and water bill in 2020.

These prices have been adjusted for inflation and so the increases seen in the above graph are entirely the result of above-inflation tariff increases implemented by Eskom and local municipalities.

An over-arching question remains: Can we afford these exponential increases in the cost of two of our most basic needs?

We will answer this important question in the final leg of our journey, in which we compare the average electricity and water bills to the average household disposable income in South Africa over the past 25 years.

Chapter 5. Electricity & water bill vs average household disposable income in South Africa

The final leg of our journey is arguably the most pertinent. We know for certain that inflation is not the major cause of the increases in electricity and water tariffs. But the real question is: Can we afford these spiralling electricity and water bills? Did South Africans’ average income keep pace?

Looking at the above graph, the conclusion must be a deafening no. While our average monthly electricity and water bills have increased by 200% since 1996, our average household disposable income[b] has increased by a mere 37% since 1996.

The divergence between these basic costs and household income is especially pronounced from 2008 onward (the past 12 years). Furthermore, our disposable income has been impacted by economic downturns and, more recently, rising income tax rates.

Two of our basic needs have become increasingly unaffordable and we continue to struggle with load-shedding. Now more than ever, we need to take practical steps to explore alternative solutions.

Although the current outlook is bleak, there is hope on the horizon. In October 2020, the Department of Mineral Resources and Energy gazetted amendments to the electricity regulations, allowing municipalities to generate and procure their own electricity. South Africa has some of the best solar PV and wind resources in the world and the cost of these options continues to fall, making self-generation as well as the renewable aspirations of the Integrated Resource Plan (IRP) more viable every day.

Appendix A. Methods & assumptions

Average electricity consumption data for different LSM (Living Standards Measure) categories was obtained from Reference [1]. LSM 1 to 4 were classified as low income, LSM 5-6 were classified as lower to middle income and LSM 7-10 were classified as middle to upper income.
Average water consumption data for low, middle & high income households was obtained from References [2] and [3]. It was assumed that water consumption remained constant over time, although it is possible that it has reduced somewhat over the years due to increasing prices and water restrictions. However, the data in the references used ranged from 2004 to 2015 and water consumption was relatively constant over this period.
Eskom electricity tariff data were obtained from its website [4].
The Consumer Price Index (CPI) was used as inflation measure. CPI data was obtained from References [5], [6] and [7].
Municipal electricity and water & sanitation tariff data for the four metropolitan municipalities Cape Town, Johannesburg, Tshwane and eThekwini were obtained from their respective websites [8], [9], [10] and [11], as well as third-party reports [12].
Where water restrictions were in place and water restriction levels changed during the course of a municipal year (such as in Tshwane or Cape Town), the tariffs for the water restriction level that was in place for most of the year was used to calculate the average tariffs for the different income levels.
Tariffs for all income group were calculated based on the ‘single dwelling houses’ category and not for apartment buildings.
‘Indigent’ tariffs were not applied in calculation of the average tariffs for the lower income group (in other words, this group is not representative of the ‘lowest’ income group, but rather the ‘lower’ income group).
All tariffs are VAT inclusive.
All tariffs are metered tariffs (as opposed to prepaid tariffs). However, for most municipalities and in most years metered & prepaid tariffs are structured the same.
For the period 1996 to 2002, the water tariff data obtained excluded sanitation tariffs. The sanitation tariffs for this period for each of the four metro municipalities (Cape Town, Johannesburg, Tshwane and eThekwini) were estimated using the respective municipality’s average sanitation tariff as % of total water & sanitation tariff for later years for which full data was available.
Disposable income data was obtained from Reference [13].
No water & sanitation tariff data could be obtained for the four-year period 2003 to 2006. For this period, linear interpolation was done between the 2002 and 2007 tariffs for each municipality.
Average tariffs across the four metro municipalities in the study (Cape Town, Johannesburg, Tshwane and eThekwini) were calculated as simple averages (in other words, not weighted by measures such as population size).

Appendix B. References

[a] https://www.engineeringnews.co.za/article/eskom-says-it-needs-r23bn-more-from-tariffs-in-2021-to-remain-a-going-concern-2020-11-05

[b] ‘Disposable income’ is defined as the total income after tax (in other words before expenses), not income after expenses.

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[2]. Viljoen N. 2015. City of Cape Town Residential Water Consumption Trend Analysis 2014/2015. Website: https://greencape.co.za/assets/Sector-files/water/Water-conservation-and-demand-management-WCDM/Viljoen-City-of-Cape-Town-residential-water-consumption-trend-analysis-2014-15-2016.pdf. Last accessed: 2020/08/02.

[3]. Bailey WR, Buckley CA. 2004. Modelling Domestic Water Tariffs. Proceedings of the 2004 Water Institute of Southern Africa (WISA) Biennial Conference. Cape Town, South Africa, 2-6 May 2004. Website: https://wisa.org.za/wp-content/uploads/2018/12/WISA2004-P004.pdf. Last accessed 2020/08/02.

[4]. Eskom Tariff History. Website: http://www.eskom.co.za/CustomerCare/TariffsAndCharges/Pages/Tariff_History.aspx. Last accessed: 2020/08/04.

[5]. Focus Economics. Inflation in South Africa. Website: https://www.focus-economics.com/country-indicator/south-africa/inflation. Last accessed: 2020/08/04.

[6]. Bureau for Economic Research. Inflation Expectations. Website: https://www.ber.ac.za/BER%20Documents/Inflation-Expectations/?doctypeid=1065. Last accessed: 2020/08/04.

[7]. Statistics South Africa. CPI headline inflation history. Website: http://www.statssa.gov.za/publications/P0141/CPIHistory.pdf?. Last accessed: 2020/08/04.

[8]. City of Cape Town Tariffs. Web pages:

https://www.capetown.gov.za/Family%20and%20home/residential-utility-services/residential-water-and-sanitation-services/water-and-sanitation-services-and-costs-for-formal-housing.

http://resource.capetown.gov.za/documentcentre/Documents/Forms,%20notices,%20tariffs%20and%20lists/L3-WaterSanitationRestrictionTariffs.pdf

https://resource.capetown.gov.za/cityassets/Files/Tariff_increases_from1July17.pdf

http://resource.capetown.gov.za/documentcentre/Documents/Financial%20documents/Budget%202018-2019%20Annexure%206%20Tariff%20Fees%20and%20Charges%20Book.pdf

https://www.capetown.gov.za/Family%20and%20home/Residential-utility-services/Residential-electricity-services/the-cost-of-electricity

[9]. City of Johannesburg Tariffs. Web pages:

https://www.joburg.org.za/services_/tariffs/Documents/annexure%2020.pdf

https://www.joburg.org.za/Campaigns/Documents/2014%20Documents/2014-15%20approved%20tariffs.pdf

https://www.joburg.org.za/services_/tariffs/Documents/2015-16%20tariffs%20for%20approval.pdf

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https://www.joburg.org.za/documents_/Documents/Other/traffifs/Approved%20tarrifs.compressed.pdf