Know your electricity costs and save money

Understanding how electricity tariffs work is the first step towards taking charge of your spending, says Citiq Prepaid managing director Michael Franze.

"Unfortunately, the exact details of how any particular electricity bill is calculated can be so complex it’s difficult for even experts to understand," says Franze.

"In the long term, the real solution is for Eskom, municipalities and the National Energy Regulator of South Africa (Nersa) to design simpler consumer tariffs. But in the meantime, there are three basic pieces of information that can help consumers to make sense of their electricity bills."

Where you live

Firstly, your charges will vary depending on where you live. If you get your power directly from Eskom, which is the case in many rural areas and in Soweto, for example, you will be charged according to a different system than if you get your electricity from a municipality.

So it's important to check what your own municipal system is.

Incline block tariff

Secondly, it's helpful to understand the incline block tariff (IBT) system.

"Basically, this means that the more electricity you buy in a month, the more you pay. In the case of prepaid customers, it has nothing to do with how much you actually use — the cost is purely based on how much you buy. This means that electricity is one of the rare cases where it's really not a good idea to buy in bulk," says Franze.

"Rather buy from week to week or buy just enough at the beginning of each month to keep you going. It's cheaper to top up with a few units at the end of each month than to buy enough to last you for two months."

A unit of electricity

Thirdly, consumers should understand exactly what they’re getting when they buy a unit of electricity.

"The terms can get confusing, but when you break it down it's actually quite simple," says Franze. "The amount of power any appliance uses, also called its power rating, is measured in Watts (W), and this is always marked on the packaging or somewhere on the appliance."

So, an energy-saving light bulb might use 20W and an iron would be around 1 000W or 1 kiloWatt (kW), for example. A unit of energy, which is measured in kiloWatt hours (kWh), is just the amount you need to run a 1kW appliance like an iron for one hour.

So, your unit will last a long time if you're using appliances with a low power rating or get used up really fast if you're using more power-hungry appliances. A good general rule is that the more heat an appliance generates, the more power it uses.

The second way to save, therefore, is to use each appliance for fewer hours.

"Fridges, freezers and alarm systems are the only things in most houses that need to be on all the time," says Franze.

Consumers should find ways to use ovens and stoves more efficiently. A wonder box for cooking grains, rice, potatoes, beans and other dishes that need slow cooking saves on electricity.

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