What is an Electricity Tariff?

Recently, we have been inundated with request about electricity tariffs. Mostly with regards to why certain some users are receiving less...

Electricity is a basic need that all of us can not live without. I say that, but sadly, some of our people still live without electricity and this is the case for many poverty stricken households.

Recently, we have been inundated with request about electricity tariffs. Mostly with regards to why certain some users are receiving less units for the same amount in rands than they have previously. For the purposes of budgeting, it would be helpful to know what it cost to run the various appliances in your household. The purpose of this blog is to go into a bit of detail into what exactly an electricity tariff is and how it is measured. We also provide you with a helpful tool to measure how much units you typically use, and this should help you with financial planning with regards to energy spend in your household.


How is electricity measured?

So, how is electricity measured? This is an important question to begin to understand how an electricity tariff works. Electricity power is measured in terms of units, called watts. Most applicances in a household requires well in excess of 1,000 watts in order to function properly, which is why we generally refer to electrical power as kilowatts. Each kilowatt representing 1,000 watts. So how is this calculated? If you take an example of a 100 watt ceiling fan, and use it for two hours a day for 30 days, you have used 100 watts of power for 60 hours.

This calculates as 100 watts x 60 hours = 6000 watt-hours of electrical energy. Or 6 kilowatt-hours (kWh) which is the measurement of electricity units.

What does it mean?

If we look at Eskom’s small customer tariffs (which is most households in South Africa), the electricity used is billed as an energy charge. This is calculated in cents per kilowatt. (c/kWh). Now, this charge (c/kWh) differs per municipality and also differs per household, depending on the tariff they are on. This is a set amount based or determined by how much electricity a house-hold uses. Those who consumes above 600kWh are charged higher tariffs (c/kWh) as those who use below 600 kWh. Remember kWh stands for Kilowatts per Hour, as calculated above

For more a deeper break-down into tariffs, click here

How do I calculate how much my appliances are costing me?

This is where it might become a bit tricky. How do I calculate how much an appliance is costs to operate? Well, once you know which tariff you are on, you need to multiply the amount of kWh a particular appliance uses by the energy rate (c/kWh) applicable to your tariff and divide by 100 to get to the Rand value. So, if we take the above example and use Eskom’s block 1 tariff for residential users, the energy charge is 153,90c/kWh (including VAT) The calculation would be as follows:

6kWh x 153,90c/kWh = 923.4/100= R9.23

So, as we can see in this example, it costs R9,23 to run a 100 watt ceiling fan, 2 hours a day for 30 days. City Power has a very nifty tool that can help you calculate this as well, see this link  for more.

As we know, this is getting costlier every year and it might be time to look at other, more eco-friendly solutions of powering your home.


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What is an Electricity Tariff?

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