poweringdevelopmentspreads08-07-0a036dc2905cbded.pdf

This report by the Public Affairs Research Institute analyzes the financial and operational crisis facing South African municipal electricity distribution and proposes integrating existing rooftop solar PV and Battery Energy Storage Systems (BESS) as a pathway to reduce bulk costs and improve reliability.

• South Africa's municipal electricity distribution sector is in a state of financial and operational decline, with aggregate municipal electricity trading recording a cumulative deficit of approximately R24bn between 2017 and 2024.
• The primary driver of municipal financial instability is the rising cost of bulk electricity purchases from Eskom, which accounted for 85.5 per cent of total municipal revenue in the 2024/25 financial year.
• Aging and poorly maintained infrastructure is the main cause of unplanned municipal outages, resulting from an infrastructure maintenance backlog estimated between R150bn and R200bn.
• There is a significant cost gap between Eskom's tariffs and renewable energy; by 2026, solar PV was more than 50 per cent cheaper than Eskom's supply, and it is estimated that by 2030, solar PV costs will be less than one third of Eskom's.
• As of December 2024, South Africa had an estimated 3,495 MWp of installed rooftop solar, generating approximately 5.01 billion kWh annually from residential, commercial, and industrial categories, which is about 2.2 per cent of total national annual demand.
• Approximately 1.1 billion kWh of rooftop solar is curtailed annually because systems stop producing power once batteries are full and usage is covered; this excess power represents a potential low-cost supply for municipalities.
• Integrating BESS with rooftop solar allows municipalities to perform tariff arbitrage by charging during off-peak times and discharging during peak periods, potentially saving over R1 million per annum per 1MW/2MWh of BESS installed.
• In the City of Johannesburg, electricity losses (technical and non-technical) are approximately 34 per cent, which is significantly higher than the international average of 15 per cent and a larger driver of financial loss than rooftop solar adoption.
• The report suggests that encouraging existing residential solar owners to increase their installation size, combined with BESS, could yield annual savings of almost R2.5bn for the Johannesburg, Ekurhuleni, and Tshwane municipalities.
• Municipalities often hinder the transition to renewables by imposing punitive policies on small-scale embedded generation (SSEG), such as forcing solar owners onto expensive postpaid time-of-use tariffs, which may accelerate grid defection.

APA

Public Affairs Research Institute (n.d.). poweringdevelopmentspreads08-07-0a036dc2905cbded.pdf. https://pari.org.za/wp-content/uploads/2026/07/PoweringDevelopmentSPREADS08-07.pdf

Chicago

Public Affairs Research Institute. poweringdevelopmentspreads08-07-0a036dc2905cbded.pdf. n.d. https://pari.org.za/wp-content/uploads/2026/07/PoweringDevelopmentSPREADS08-07.pdf.

Wikipedia

{{cite report |author=Public Affairs Research Institute |title=poweringdevelopmentspreads08-07-0a036dc2905cbded.pdf |url=https://pari.org.za/wp-content/uploads/2026/07/PoweringDevelopmentSPREADS08-07.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{publicaffairsresearchinstitutendpoweringdevelopmentspreads08070a036dc2905cbdedpdf, author = {{Public Affairs Research Institute}}, title = {{poweringdevelopmentspreads08-07-0a036dc2905cbded.pdf}}, institution = {Public Affairs Research Institute}, url = {https://pari.org.za/wp-content/uploads/2026/07/PoweringDevelopmentSPREADS08-07.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }