The simple way to save money when buying prepaid electricity
Eskom’s Incline Block Tariff system means the best time to top up a prepaid electricity account is on the first of the month.
This is according to energy expert Ted Blom, who explained that the more electricity you use, the more you pay per block.
Eskom’s Incline Block Tariffs divide the electricity price into several steps or blocks.
The first block of electricity is at the lowest price. As customers purchase more electricity during the month, the electricity bought will eventually fall in block two, which is more expensive.
The way an inclining block tariff works is the first block of energy is cheaper than the next block(s) you purchase in a calendar month.
This is not dependent on the time period in the month, but it is dependent on the amount of units (kWh) that the customer buys.
So even if a Homelight 20A customer buys 400 units on the 01st of the month, the 350 units will be charged at the block 1 rate and the other 50 will be charged at the block 2 rates.
In other words, block one purchases in a calendar month, irrespective of when, will be at the cheapest block rate and block two at corresponding block rates.
Please note that the tariff resets on the first of every month, that is, on the first of the month, all purchases up to 350kWh will be charged at the rate of block 1.
Eskom said the process to move from the one block to the next is automatic and depends only on the amount of electricity that is acquired by the customer.
The movement to the next block is not affected whether the purchases are spread over many transactions or if all the electricity is part of one transaction.
Because the blocks increase in price, customers can save money by not buying more electricity than what they will use during the month.
It is much better to wait until the next month to start buying electricity again as it will fall into a lower-priced block.
Eskom’s Incline Block Tariff – How it works
The tariff structure is divided into two blocks, with each block having a different rate.
If you purchase up to 350kWh of electricity a month, you will pay the rate of block 1.
If you purchase more than 350kWh you will pay a higher rate as indicated in block 2.
If your first purchase in the month exceeds 350kWh, then the 350kWh is charged at the rate of block 1 and the additional units are charged at the rate of block 2.
Further purchases in the same month will be charged at the rate of block 2 only.
The tariff resets on the first of every month and all purchases up to 350kWh will be charged at the rate of block 1.
This tariff structure works on the principle that the more you purchase in a single month, the higher the price for that portion of the electricity, which means that customers are charged at a higher rate as their consumption becomes higher.
To keep your electricity costs under control, you should use electricity efficiently to avoid moving into the higher consumption block and subsequently the higher rate.
The images below provide an overview of Eskom’s Incline Block Tariff.