A small municipality in a South African tourist hotspot charges a R582.64 solar panel levy

Thaba Chweu Local Municipality is under fire over a new R 582.64 solar panel levy for properties which decide to disconnect from the grid.

Thaba Chweu Municipality is a local municipality within the Ehlanzeni District Municipality, in the Mpumalanga province of South Africa.

It includes popular tourist towns such as Sabie, Graskop, Lydenburg, and Pilgrim’s Rest and is governed by the ANC.

The municipality is plagued by financial and operational challenges and is frequently classified as dysfunctional or distressed.

It has struggled with debt owed to Eskom, and its financial sustainability is undermined by non-revenue distribution losses.

Official regulatory reports indicate that electricity distribution losses exceed 50%, driven by illegal connections, ageing infrastructure, and unmetered usage.

The poor service delivery and high prices have prompted many homes and businesses to install their own solar and battery backup systems and disconnect from the grid.

To compensate for this revenue loss, the Thaba Chweu Municipality has implemented a new levy on properties disconnected from the grid.

This did not sit well with the non-profit civil rights and lobby organisation AfriForum and the Freedom Front Plus (VF Plus).

Last week, AfriForum demanded that the municipality and the National Energy Regulator of South Africa (NERSA) explain and rectify a solar panel levy.

According to AfriForum, the new levy implemented by the Thaba Chweu Local Municipality is unlawful, irrational, and unreasonable.

In a legal letter issued to the municipality, the organisation raises concerns about the municipality’s new solar panel levy appearing on residents’ municipal accounts.

“This levy of R 582.64 is charged on all properties that choose to disconnect their properties from the electricity grid and solely rely on solar panels,” it said.

AfriForum said it amounted to an unlawful tax and that there is no evidence that this levy was preceded by a lawful and transparent public participation process.

It also raises questions over whether the tariffs are supported by a cost-of-supply study and whether their adoption complied with municipal and electricity legislation.

This week, Freedom Front Plus councillor in the Thaba Chweu Local Municipality, Gerda Venter, also questioned the new R582.64 solar panel levy.

She asked the Thaba Chweu Local Municipality to clarify the monthly levy and argued that it should be suspended until its legality is confirmed.

Venter requested the Municipal Manager, Roy Makwakwa, to provide the cost-of-supply study, the relevant council resolution, and proof of public participation.

She also wants Makwakwa to provide the National Energy Regulator of South Africa’s approval and give an explanation of the tariff to councillors.

“The Municipality needs to clarify what actual service or benefit residents gain in exchange for this amount,” Venter said.

“Thaba Chweu cannot charge an electricity-related levy on residents’ accounts without providing a clear, lawful and properly motivated reason.”

She said that Thaba Chweu residents are already saddled with high electricity tariffs, excessive fixed charges, and constant service delivery failures.

“The Municipality should not regard them as an easy source of revenue and add to their financial burden,” she said.