When a family in Lydenburg installed a rooftop solar system that never needed the municipal grid, the last thing they expected was a bill line reading “R582.64 levy”, a charge the regulator calls a fee for “networks that are available but not connected”. The fee, approved by the National Energy Regulator of South Africa (Nersa) for Thaba Chweu Local Municipality, is now the focus of a legal challenge by civil action group AfriForum.
AfriForum has sent a letter of demand to both the municipality and Nersa, demanding proof that the levy was introduced following a lawful, transparent process. The group argues the charge is effectively a tax on using the sun, because it compels owners of completely off-grid solar systems to pay for network capacity they will never draw on. “There is no evidence of a proper public participation process,” the group said, adding that the levy may be unlawful, irrational and unreasonable.
What the levy covers
Nersa’s Reasons for Decision document, part of the municipality’s 2026 electricity tariff application, authorises the new levy of R582.64 per month. It sits alongside existing basic charges for small-scale embedded generation (SSEG) customers, a flat fee of R321.11 and an access charge of R10.92, both introduced in July 2026. Those basic fees apply to customers who remain connected to the grid but generate some of their own power. The new levy, however, targets users whose systems are fully independent of the grid.
Utilities explain that they must keep enough capacity on the grid to serve all customers, even those who are not currently drawing power. That rationale underpins the so-called capacity charges that appear on many bills. For households that have no grid connection at all, AfriForum says the logic collapses, they are being asked to pay for a service they will never use.
Thaba Chweu’s electricity business is under pressure. Nersa flagged technical and financial performance failures, including energy losses of 53.16 percent, which undermine the municipality’s financial sustainability. The municipality’s deficit fell from -108.80% in the 2023/24 financial year to -50.27% in 2024/25, but it still records a shortfall of roughly R33 million because bulk purchases of R393.2 million of electricity generate only R360.2 million in sales.
AfriForum’s letter, dated 20 July, asked for the cost-of-supply study, public notices, council resolutions and any comments received from the public, together with an explanation of how those comments were considered. The group gave the municipality and Nersa ten days to respond, warning that failure to do so will lead to a High Court application for relief.
For small business owners in the area who rely on solar power to keep costs down, the levy could erode the financial advantage of going off-grid. If the charge is upheld, a typical household with a 5 kW system could see an extra R7 000 a year in fees, a significant amount for many South Africans still coping with high electricity prices and load-shedding.
The broader issue is whether financially distressed municipalities are using solar users as a new revenue stream. AfriForum has taken on several municipalities over similar charges and has previously forced Nersa to scrutinise cost-of-supply studies. The group maintains that municipalities may recover legitimate network costs, but any new charge must be lawful, transparent, cost-reflective and properly authorised.
At present, the levy remains in force. Until a court decides otherwise, households that are completely off-grid will continue to see the R582.64 line on their bills. The outcome of AfriForum’s challenge could set a precedent for how municipalities across South Africa price network capacity for solar users, and whether off-grid households can truly be exempt from grid-related charges.
