South African city kisses R350 million goodbye

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South African city kisses R350 million goodbye
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Many municipalities rely on distributing electricity for Eskom to generate revenue. As home solar takes over, they will have to look elsewhere to plug the holes in their budgets — and fibre networks are an easy target.

Many South African municipalities and metros generate a significant portion of their revenue by selling electricity to residents.

“This increase in reliance on renewable energy is a welcome development for the environment, but poses a significant challenge to municipalities, which derive the majority of their income from electricity sales,” Gordhan said. “Energy experts suggest that feed-in tariffs, along with the installation of smart meters, are the most feasible strategy to overcome the potential losses to municipal income,” Gordhan said.

For the 2023/24 financial year, the road reserve fee was increased to R251 per kilometre per annum, while the sewer and stormwater fee was increased to R1,138. While rates do form a sizeable chunk of this revenue, the Kouga official explained that the primary source of money for the municipality is electricity sales.

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