The Impact on Property Owners

For property owners—whether in the residential, commercial, or industrial sectors—this price hike will likely increase operational costs, pushing up utility bills. This will particularly affect landlords and real estate investors who depend on reliable, cost-effective energy to maintain property profitability. As utility bills rise, rental rates may have to be adjusted to cover the difference, which could deter tenants or lead to vacancies, especially in competitive markets.

Commercial property owners, particularly those managing large facilities, will feel the strain even more. Higher electricity rates could squeeze profit margins, forcing owners to make difficult decisions, such as reducing energy consumption or passing costs onto tenants. The latter could lead to a ripple effect in sectors such as retail and office rentals, where rising costs may discourage business tenants already navigating tough economic conditions.

In terms of property value, areas that rely heavily on Eskom’s grid for electricity may become less attractive to potential buyers. Properties with energy-efficient features or renewable energy sources like solar power could stand out as better investments, adding value by offering lower long-term operational costs.

How to Prepare and Mitigate the Impact

To offset the potential financial burden, property owners should consider implementing energy-saving technologies. Solar power systems, energy-efficient appliances, and smart meters can help reduce reliance on Eskom’s grid and lower electricity bills. For landlords, providing energy-efficient features can be a strong selling point to tenants who are increasingly conscious of rising living costs and the need for sustainability.

Another option for property owners is to explore off-grid or hybrid power solutions that can mitigate exposure to Eskom’s tariff increases. Solar panels, battery storage systems, and alternative energy sources not only lower utility costs but also add a layer of energy security, making properties more attractive to energy-conscious tenants or buyers.

Eskom’s proposed 36% electricity hike will undoubtedly reshape the financial landscape for property owners across South Africa. Increased operational costs, potential changes in rental dynamics, and fluctuating property values are just some of the challenges ahead. However, by investing in energy-efficient upgrades and exploring renewable energy solutions, property owners can reduce their dependency on Eskom, protect their bottom line, and potentially increase the value of their properties in a competitive market. While Nersa’s final decision is still pending, proactive planning and adaptation can help property owners stay ahead of these rising costs​.