Eskom Electricity Easter Special (buy 100 get 10 free!)

It’s the most wonderful time of the year… not Christmas, not Easter. It’s cheap Electricity hack day! Okay it’s not buy 100 get 10 free, but it is save 12.7% on units you buy now, rather than later – as long as you are smart!

That’s right! If you are on Eskom prepaid at this time of year you can buy extra electricity at 2023 prices before prices increase on 1st April 2024! (The same thing happens for Municipality customers just before 1st July 2024). BEWARE though, you can’t load up your trolley (or meter in this case) with as much as you can afford; you need to be aware of Inclining Blocks. Depending on how much you’ve already bought this month and how much you use every month, your ability to buy extra at 2023 prices might be limited.

There’s a nice description by the guys at Prepaid24 here: https://www.prepaid24.co.za/page/article-electricity-block-or-step-tariffs-explained
[It’s not entirely correct (CoCT doesn’t have a 0-50 block that I’m aware of!) but the description and diagrams are nice!]

Just like previous years, you have to be clever about it – otherwise you might end up spending more**

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The Golden Reduced Electricity EBug Discount, Yearly rule (aka. the GREEDY rule) is:

• You should buy units until you’re at the TOP of the BLOCK that you normally use
  • For most* Eskom prepaid users there’s 2 blocks below 600kWh and above 600kWh
  • So if you use OVER 600kWh every month, then you can buy as much as you want – but then carry on buying 600kWh every month – until you need to buy more
  • If you use UNDER 600kWh then you should buy up to 600kWh in total in the month, then afterwards nothing until you’re running out!

* . There are also Homelight 20A (for indigent/informal settlements) – for users in that category we would NOT recommend buying in advance as you should get Free Basic Units (50/month) which may be impacted by overbuying** (see below)
Also HomeFlex – which is a time of use tariff, which I don’t think you can have on prepaid!

I’ll work on an example for Eskom Homelight 60A first.

HomeLight 60A Tariff: If you use LESS than 600kWh on average

• If you use less than 600kWh per month – then you must be buying LESS than R1422 each month
• This month you should buy R1422 in total for the month so
  • If you already bough R500 in March, then spend another R922 before 1st April 2024
• After that, you just buy what you need – i.e. nothing until you’re low
• This will save you 12.7% on any extra you buy
  • If you normally spend R500 every month, then you’ll get 211 units normally
  • This month you’re buying 600 units at the current price = 389 extra units for R922 extra spend
  • Those 389 extra units you’re getting for R922 now, but you’d pay R1039 for those same units in April – i.e. you’re saving R117 buying them now rather than after April (or 12.7% – the same as the tariff rise!)

HomeLight 60A Tariff: If you use MORE than 600kWh on average

• Before 1st April 2024 buy AS MUCH AS YOU feel comfortable doing*
  • If you normally use 800 units each month then you could buy 6 months of 200 units – i.e. 1200 units extra on top of the units I normally buy (800) – so 2000 units
  • Converting to Rands thats:
    • 600 units at R2.3697 = R1422 PLUS
    • 1400 units at R4.0278 = R5639
    • Total R7061 spent in March 2024
  • 6 months is just a guide, maybe you only want to put 1 month of cheaper units in the bank, or maybe you’re willing to go for a full year or more! It’s completely up to you*
• After 1st April 2024 – you MUST continue buying 600 Units EVERY month – until you run out
  • On the new tariff of R2.6713 per unit – that means buying at least R1603 each month in order to use up all the cheaper rate tokens you get each month
• Why does this work? —  you’re buying MORE units at R4.02 to replace units that you’d otherwise have to be R4.54 for… that’s why you have to keep buying the cheap units after April. If you don’t keep buying your 600 units each month, you’ll have paid R4.02 for units that you could have paid R2.67 for!
• Doing the example above you’ll buy 2000 units rather than 800 in March (spending R7061 rather than R2227 you normaly spend). After April you’ll buy 600 units = R1603 (rather than the cost of 800 units after R2511 – using up 200 units of your spare each month)
• After 6 months I’ve bought and used 5600 units
  • If I buy 800 units every month (i.e. R2227 this month and 2511 after April) – then I’ll spend R17,294
  • If I buy 2000 units NOW and 600 for the next 6 months – I’ll still have bought 5600 units, but only spent 15873 – saving of 1,421 for an investment of R4000 over 6 months, that’s not bad, better than a savings account (I work out the IRR to be around 20% – contact me if you want to know more!)

* Personally I’d be worried about having extra units for more than say 6 months… say I move house, or the meter breaks I risk losing those units… 

** if you get FREE BASIC units – then this probably isn’t a great idea! If you buy too much one month you might end up losing your allowance of free units, which will cost you MUCH more in the long run. For those who get free units, we’d always recommend only buying what you need every month – and make sure you ALWAYS collect your free units every month, even if you’re away – so just make sure you go to the shops and buy a basic level say R50-100… every single month. Every year about 1 in 10 people who are entitled to free units doesn’t collect them, don’t be one of those people! Whether you are entitled to free units depends on your municipality – generally you have to be qualified as ‘indigent’ but in some places old age pensions can qualify – and in some areas you must use under a certain amount every month or year… ask someone at your municipality if you think you aren’t getting what you deserve.