Tariff Unbundling - The Hidden Cost Curveball for Property Pros

If you're a property developer, investor, or landlord in South Africa, there's a new buzzword you can’t afford to ignore tariff unbundling. Gone are the days of a neat little electricity bill with one rate per kilowatt-hour. Now, thanks to Eskom and NERSA's push for "cost-reflective" pricing, we’re in the era of multi-part electricity bills. Think of it as the Netflix of power billing- basic fee, usage, and those sneaky extras you didn’t budget for.

Here’s the deal: tariffs are now split into three main charges- the energy you use (c/kWh), the capacity you reserve or peak at (R/kVA), and network/admin fees (just because). The logic is sound: consumers should pay based on how they use the grid, not just how much. But for property folks? It’s a curveball that’s already impacting valuations, cash flow, and how developments are planned.

For example, a commercial property with spiky demand, say an office block with a power-hungry HVAC system (it’s a fancy word for an aircon), could now be hit with steep capacity charges, even if its overall energy usage is modest. That’s because the grid is pricing in your worst-case demand. So, one hot afternoon could cost you thousands for the month.

And here’s where it gets interesting: buildings that can control their peak demand, through clever load management or battery storage, are now worth more. Solar panels used to be about going green but now, they’re about dodging peak charges and protecting your NOI (net operating income). Smart developers are designing buildings with smaller transformers, intelligent energy systems, and flexible load profiles to keep demand charges down. Landlords are reviewing lease terms and how much of the utility cost they can realistically pass on to tenants without causing a revolt.

In short, energy efficiency is no longer a feel-good checkbox, it’s a financial survival strategy. And if you’re not modelling these new tariffs into your operating projections, you’re flying blind in a storm of rising costs.

So, what’s the bottom line? It’s not just how much electricity your building uses — it’s when and how intensely it uses it. That’s the game now. And in this new energy landscape, buildings that flex, adapt, and self-supply are going to win, while the rest get stuck with scary bills and grumpy tenants.

Thanks for plugging in where the wires never stop buzzing in SA’s property and utility scene, and neither do I.

I’ll be back next month with more insights, updates, and a few jolts of unexpected info to keep you ahead of the current.

Until then, stay switched on and never trust a tap that rattles.