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Why is your business electricity bill so high? 5 ways to cut it
Three things push a business electricity bill up in South Africa: prices rise every year, you pay extra for your single highest spike in demand, and power costs more in the busy hours. You can do something about all three.
Why does my business electricity bill keep going up?
Because the price goes up every year, and faster than most of your other costs. Eskom's direct customers paid 12.74% more from April 2025 (source). From 1 April 2026 they pay another 8.76% (source).
If you buy from the municipality, the city buys from Eskom first. Bulk prices to municipalities go up 9.01% from 1 July 2026, and the big metros moved their own tariffs up in line with it (source).
So even if your site uses exactly the same power as last year, you pay more for it.
What is a demand charge, and why is it so big?
A demand charge is what you pay for the highest load your site pulls in a month. On most business tariffs it is measured in half-hour blocks. One bad half hour sets the charge for the whole month (source).
That means one morning where every machine, compressor and cold room starts at once can cost you more than a week of normal running.
Look for the line on your bill marked in kVA, not kWh. That is the demand charge. If it is a big share of the total, your peaks are costing you money.
Why does power cost more at certain times of day?
Because most business tariffs are time-of-use. Power costs the most in the weekday morning and evening peaks, and the least at night and on weekends. In winter (June to August) the peak price is at its highest.
If your heavy load runs in those peak hours, you pay the top rate for it.
5 ways to cut your business electricity bill
- Check you are on the right tariff and demand level. Your notified maximum demand is the capacity you told the utility you need. Set it too high and you pay for capacity you never use. Set it too low and you pay penalties when you go over. Ask for 12 months of bills and check both.
- Flatten your peaks. Stagger the start of big motors, compressors and cold rooms instead of switching everything on at 7am. The same work, spread over an hour, can cut the one spike that sets your demand charge.
- Move heavy work out of peak hours. Batch jobs, charging, pumping and pre-cooling can often run in standard or off-peak hours. Every kWh you shift is paid at a lower rate.
- Fix your power factor. Some tariffs charge for reactive energy when your power factor is poor, usually from motors and old lighting. Power factor correction equipment often pays for itself quickly. Your electrician can read it off your meter data.
- Make your own daytime power. Solar on your roof or yard covers daytime load, which is when most factories and warehouses use the most. With a power purchase agreement (PPA), a company like Darkstar pays for the system and you buy the power at a rate below what you pay now. See how a solar PPA works.
Which of these saves the most?
The first four cut waste. The fifth changes what you pay for most of your daytime power, so on a site that runs in daylight it usually moves the bill the most.
The quickest way to know for your site is to put your own bills next to the numbers. A free site assessment does exactly that: send twelve months of bills and you get a price built on them.
