Pre-paid vs post-paid

Energy advice: Should I go pre-paid or post-paid (metered electricity)?

If you are a landlord there is no question go pre-paid – your tenant can never run up an out of control bill; plus certain pre-paid suppliers will pay you a commission on your tenant’s usage. The meter if it needs to be retrofitted to your property can cost between R 1 500 and R 7 000 installed, steer clear of “free” meter offers – you will pay for it.

As a tenant or homeowner pre-paid forces you to be more disciplined in terms of your usage; it comes back to the old saying “what you monitor you can control”, people who are on pre-paid tend to know what their usage is better than those on post-paid. With pre-paid you will not get surprises at month end and will not be likely to get into disputes with the supplier. Pre-paid or electronic post-paid meters will not generally allow you to feed electricity back into the grid; there are a few exceptions.

Electricity is supplied in most cases by Eskom and/or your local municipality; newer suburbs and industrial areas tend to be Eskom supplied. Pre-paid and Post-paid electricity for domestic usage in Cape Town is supplied by Eskom and City of Cape Town (CoCT). All power supplied by CoCT and Eskom is billed at the same rate per kWh (or unit) irrespective of whether it is pre-paid or post-paid.

Just be careful that if you are a low user and are on the lifeline (CoCT) or Homelight (Eskom) tariffs you don’t go over the 350kWh or units per month usage; rather change to Domestic tariffs if you use more than 350kWh per month.

If you are on the domestic tariff your step up to the higher charge starts at 600units per month. Never buy prepaid in bulk because all the power bought in excess of the lower limit will be billed at the higher rate no matter when it is used; rather top up close to month end and buy as little as possible. Attached is a chart listing the charges as applied to most residential users and a comparison of what happens if you stay below the step charges (<600kWh) and if you use more. All figures ex vat.

If you are paying more than the published rates (see attached chart) for pre-paid you are paying a middle-man of some sort a commission; shop around for better rates. Be aware of deals that offer a free meter and installation; the rates will be higher and may contain service fees. Pre-paid can be bought through various outlets, online, mobile apps or your bank.

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