You are holding two things. A winter power bill. And a solar quote that says the system pays for itself in about a year.
Both came from people who can do sums.
Only one of them is right.
The error in most solar payback calculations is a single number. It sits in one cell of the model. It makes the answer look about four times better than it is.
It is not the panel price. It is not the yield. The sums add up fine. The inputs do not.
Here is how to find it, and how to redo the maths.
First, check who actually bills you
Do this before you open a spreadsheet.
- Eskom-direct customers are on tariffs like Megaflex, Nightsave Urban, Ruraflex or Businessrate. Your increase was 8.76%, on 1 April 2026.
- Municipal customers are not. If eThekwini, Johannesburg or Cape Town reads your meter, you are not on Megaflex. Your city paid 9.01% more for bulk power from 1 July 2026, and passed that on. eThekwini approved 9%.
Municipal tariffs are built differently. Different time blocks. Different demand charges.
Every rate here is Eskom Megaflex, non-local-authority, Transmission zone ≤300 km, ≥500 V and under 66 kV. If that is not your supply, the method works. The numbers do not.
Why your solar kWh is worth 180 cents, not 720
Megaflex is a time-of-use tariff. Same power, different price, depending on the hour. Think of a petrol station that reprices three times a day.
In winter, weekdays carry two peak blocks of about two hours each. One early morning, one early evening. Standard fills the working day. Off-peak runs overnight and the weekend.
In summer both blocks shift about an hour later. Appendix A, Figure 2 of the Schedule has the exact times.
Now lay a solar generation curve over that. In a KZN winter the sun is barely up when the morning peak starts. It has set before the evening block. Your array makes its whole output inside the standard period.
The number that decides your payback
720.19 c/kWh is the Megaflex peak rate in winter. A real number, straight off the 2026/27 Schedule of Standard Prices.
180.05 c/kWh is the standard rate. That is what your panels displace. Four times smaller. Same tariff, same page.
A quote that prices every solar kWh at peak is valuing a moment when the array is asleep.
So the question is not how much power you use. It is when you use it.
A site that peaks at midday gets standard value from every panel. A site that peaks at 18:00 gets very little in winter. Think of a cold store pulling down after the doors close. No sun left to catch.
One upside I leave out of the base case. In summer a sliver of output does land in peak, at 298.89 c/kWh.
The solar payback calculation, step by step
Take a 500 kWp rooftop array on a Megaflex site. Every assumption is on the table.
The Eskom rates are published and checkable. The capex, yield and self-use figures are Terawatt modelling assumptions — an honest label, not a disclaimer.
Assumptions
- Published rates (checkable): Megaflex, non-local-authority, ≤300 km, ≥500 V and <66 kV. Standard energy 180.05 c/kWh high season, 168.05 low season. Riders: legacy 24.14, ancillary service 0.42, electrification and rural network subsidy 5.37, affordability subsidy 5.10. All c/kWh, excl VAT.
- Terawatt assumption: 500 kWp fixed-tilt north-facing rooftop. Yield of 1,600 kWh per installed kWp a year, for coastal KZN.
- Terawatt assumption: 90% self-consumed, meaning used on site rather than exported. Six-day week, no export credit.
- Terawatt assumption: 20% of yearly output falls in the Jun–Aug high season, 80% in Sep–May.
- Deliberately conservative: all self-used output priced at the standard rate. No peak offset claimed.
- Terawatt indicative pricing: R11,000/kWp installed, so R5.5m excl VAT. It moves with the rand and with panel and inverter prices. A starting point, not a quote.
- Everything excl VAT. A VAT-registered business claims the input VAT back.
- Year-one figures only. No escalation, no ageing, no upkeep, no finance cost.
Step 1 — what the array makes, and what you use
500 kWp × 1,600 kWh/kWp = 800,000 kWh a year
800,000 × 90% = 720,000 kWh self-consumed
Step 2 — price that energy at the rate that applies
Split it by season.
High season: 720,000 × 20% = 144,000 kWh
144,000 × 180.05 c = R259,272
Low season: 720,000 × 80% = 576,000 kWh
576,000 × 168.05 c = R967,968
Subtotal: R1,227,240
Step 3 — add the riders everyone forgets
Four charges are levied on every kWh you draw:
24.14 + 0.42 + 5.37 + 5.10 = 35.03 c/kWh
720,000 × 35.03 c = R252,216
That step is worth more than a quarter of a million rand a year. Most quotes leave it out. Those charges fall away with the kWh.
Step 4 — year-one saving and simple payback
R1,227,240 + R252,216 = R1,479,456 a year excl VAT
R5,500,000 ÷ R1,479,456 = 3.7 years
Now run the same array through the version on my desk. Every kWh priced at peak.
720,000 × 720.19 c = R5,185,368
Payback lands at just over twelve months.
Same panels. Same roof. Same sums. One different rate.
The honest 3.7 years drifts longer once you add upkeep, insurance and panel ageing. It drifts shorter as tariffs rise. We model this class in a high-three to mid-four year band. A range, not a promise.
Our savings calculator works the same way. And sizing the system correctly matters more than any tariff assumption.
What solar never touches on a Megaflex bill
This is the part your CFO will find.
Your bill charges you twice. Once for energy — how many litres of water you drew. Once for demand — how wide the pipe had to be. Solar only touches the litres.
Megaflex carries four demand charges, in rands per kVA per month:
- Distribution network capacity R39.13
- Distribution network demand R26.29
- Transmission network R11.15
- Generation capacity R12.27
R39.13 + R26.29 + R11.15 + R12.27 = R88.84/kVA/month excl VAT.
Now take a site with 1,200 kVA of chargeable demand. That is the biggest gulp of power it took in any half-hour.
R88.84 × 1,200 = R106,608 a month. Or R1,279,296 a year excl VAT.
The uncomfortable bit
A 500 kWp array does not reliably cut a rand of that R1.28 million.
The network capacity charge is billed on annual utilised capacity — a yearly high-water mark. One cloud-free Tuesday does not move it.
The network demand charge is set by your worst half-hour in the peak and standard periods. That will be an overcast midday or a winter evening. The array is doing nothing then.
One of those four does respond to load shaping: the distribution network demand charge, at R26.29/kVA/month.
On 1,200 kVA that is R31,548 a month, or R378,576 a year.
Moving it takes a battery that holds the site down through both peak blocks. Think of a dam wall — it catches the flood so the peak never reaches the meter. Load management does the same job.
Panels cannot do it. Any quote that credits solar with demand-charge savings should go back to the sender. Our guide to peak shaving with battery storage covers that side of the bill.
Why next April matters more than this one
The best reason to build now is not the 8.76% you already took. It is what is queued behind it.
NERSA got Eskom’s regulatory asset base wrong by R54.7 billion. A High Court order forced public consultation. The regulator chose to recover the error over three years:
- R12 billion in 2026/27
- R23 billion in 2027/28
- R19.7 billion in the next period
Without that recovery, this year’s rises would have been 5.36% for Eskom-direct customers and 6.19% for municipalities. Not 8.76% and 9.01%.
Read that again. The instalment inside your current bill is the small one. It roughly doubles next year.
So a payback built on today’s rates is cautious, not hopeful. It assumes power never gets dearer. It will. The direction of Eskom’s tariff trajectory has only ever moved one way.
One caution on tax. There is an accelerated capital allowance for renewable-energy and storage assets. It can shorten an after-tax payback a lot. But the rate and eligibility turn on the asset and its use. Our overview of Section 12B is a starting point. Check it with your tax advisor.
What to do this week
Three steps. None of them cost anything.
- Find the tariff name on your bill. That decides which rates apply.
- Open your solar quote and find the c/kWh rate it used. If it is your peak rate, the payback is overstated.
- Ask for the model again, with the time-of-use split shown — kWh in peak, standard and off-peak.
One honest disqualifier. If your site works mostly after dark, panels alone will not do much in winter. Look at storage first.
Frequently asked questions
Does solar reduce my Eskom demand charges?
Not reliably. The network capacity charge is billed on annual utilised capacity, a yearly high-water mark. The network demand charge is set by your worst half-hour. That is usually an overcast day or a winter evening, when panels make nothing. Storage or load management moves it.
My solar quote used my peak rate. Is that wrong?
Almost certainly. Unless the system has storage that discharges into the peak blocks, your array generates in the standard period. On Megaflex that is 180.05 c/kWh in the high season and 168.05 in the low season. Ask for the model again with the split shown.
I am billed by eThekwini, not Eskom. Does the 8.76% apply to me?
No. The 8.76% is the Eskom-direct rise from 1 April 2026. eThekwini’s end-user increase was 9%, from 1 July 2026. Cities paid 9.01% more for bulk power that day. You are on a municipal tariff, not Megaflex, so work from your own schedule.
Should I wait for next April’s increase before deciding?
Waiting does not make the system cheaper. It makes the power you buy meanwhile dearer. If a project pays back in under four years on today’s rates, it pays back faster on next year’s. The one good reason to wait is a usage profile about to change.
Get a payback number you can defend in a board pack
Send us twelve months of bills, plus any solar quote you hold. We will rebuild the model on your own tariff, time-of-use split and demand profile. Then we show which parts of the bill solar fixes, and which need storage. If it does not work, we say so.
All Eskom rates are from the 2026/27 Schedule of Standard Prices effective 1 April 2026, excluding VAT. They are for non-local-authority supply, Transmission zone ≤300 km, ≥500 V and <66 kV. Capex, yield, self-consumption and payback figures are Terawatt modelling assumptions.
