- Understand how the Inclining Block Tariffs work.
- Buy electricity at the start of every month.
- Only buy the electricity you will need for one month.
- Purchase electricity from a provider that doesn’t charge for the service.
1. Understand how prepaid electricity is charged.
Electricity is expensive. But it is also vital to living well and working well. To save on electricity usage, one can buy energy-efficient appliances and put steps in place to use electricity more sparingly, like switching off the lights when you’re not in the room. Better yet, if you have a prepayment electricity meter, understanding how prepaid electricity is charged is key to working out how to buy more electricity for less.
Inclining Block Tariffs and how they impact the price of electricity.
For many of us with prepayment electricity meters, it can all be very confusing at times. On one day you seem to get more units for your money and other days – a lot less. While it may feel a bit hit and miss, it all comes down to a process called Inclining Block Tariffs (IBTs)
The thinking behind IBTs is to cross-subsidise low-income households. How this works is that the overall electricity price is divided into several “blocks”. The first Block is the most affordable and as you buy more electricity during the month, you may automatically tip over into Block 2, which is a touch more costly.
This system repeats as you buy more and more electricity, progressively moving into increasingly expensive Blocks. Come month’s end, the slate is wiped clean, and you start the next month from Block 1 once again.
This tariff structure means that the more prepaid electricity you buy, the higher your average price will be. By contrast, the Inclining Block Tariff protects lower-usage customers against high price increases.
How to stay within the cheaper electricity usage Blocks
The upside to the Inclining Block Tariff is that you can control how much you spend by staying within the more affordable Blocks. But first, take note that different municipalities/cities have different tariffs and Block limits.
In Cape Town, for example, the Block 1 limit is rated at 600 kWh and power consumption costs R262.84*. If you consume more than 600 kWh in the month you will automatically move into Block 2 and your cost will jump to R362.72*.
* Based on Domestic Tariff
| Cape Town | Block limit |
| Block 1 | 600kWh |
| Block 2 | Any usage above 600kWh |
On the other hand, the prepaid electricity limit for Block 1 in Johannesburg is 350kWh per month with electricity costing R205.62**. Any consumption above 350kWh falls under Block 2, and the charges can climb to as much as R303.58**.
| Block limit | |
| Block 1 | 350kWh |
| Block 2 | 500kWh |
| Block 3 | Any usage above 500Wh |
** Based on Residential Prepaid
2. Buy your prepaid electricity at the start of every month.
The Incline Block Tariff system starts from scratch at the beginning of every month, offering 275 kWh Free Basic Electricity before rolling into Block 1. Remember, with the Incline Block Tariff system, the more electricity you buy in a month, the more you will pay per unit. So buy electricity at the beginning of each month and top up with a few units at the end of each month rather than running the risk of automatically rolling into another more expensive Block.
3. Only buy the electricity you will need for one month.
While buying in bulk is often cheaper, this is not the case when it comes to purchasing prepaid electricity. Here’s why: At the start of every month, users automatically get 275 kWh in Free Basic Electricity. If, however, you buy electricity for the whole year at once, you will lose out on 11 months’ worth of Free Basic Electricity and as a result, your average monthly expense will be higher. Rather work out how much electricity you are likely to use for the month (it’s also a good idea to keep a record) and maximise the benefit of staying within cheaper tariff Blocks.
4. Purchase electricity from a provider that doesn’t charge you extra for the service.
While one can buy prepaid electricity from many retailers, there is an advantage to buying your prepaid via your bank. Most South African banks offer their customers the option to purchase prepaid electricity using USSD, their banking app or Internet banking. Not only is this a convenient and safer solution to carrying cash it can also save you money as you can skip the time it takes to stand in queues and on transport fare. But note, not all banks charge the same, or if at all.
| Bank | Prepaid electricity fee |
| ABSA | R1.50 |
| Capitec | R0.50 |
| FNB | R2.70 |
| Standard Bank | R1.50 |
| TymeBank | Free |