As South Africans step into a new year, households are once again doing the annual financial recalculation – school fees, transport costs, municipal charges and the steady creep of everyday expenses that tend to arrive all at once in January. While headline inflation may be showing signs of easing, the lived reality for many families is one of renewed pressure, tighter budgets and difficult trade-offs.

Energy costs are emerging as a key fault line in that calculation.

Although load shedding has eased compared to previous years, electricity bills continue to rise, driven by tariff increases, municipal surcharges and peak-time pricing. According to new analysis by Kwikot, the start of the year is exposing a hard truth for households: energy may be more available, but it is becoming increasingly unaffordable, and a large share of that pressure is coming from a single, often overlooked source – hot water.

“South Africa has spent years asking whether we have enough electricity,” says Murray Crow, Managing Director of Kwikot. “Now households are asking a different question: even if it’s available, can we afford to use it?”

The hidden cost driver inside South African homes

Data from the Department of Mineral Resources and Energy shows that the residential sector accounts for 19% of South Africa’s total energy consumption, and electricity makes up only around a quarter of household energy use. Yet despite being a minority energy source, electricity carries the highest cost and system risk for households.

Within that electricity usage, water heating is the dominant factor.

“Water heating typically accounts for 40 to 50 percent of a household’s electricity bill,” Crow explains. “That means half of what families pay for power every month is going into a single appliance – one that was designed for a very different energy and pricing era.”

As electricity tariffs continue to rise faster than inflation, this imbalance is becoming more pronounced, shifting energy stress away from outages and toward affordability.

From load shedding to bill shock

South Africa’s energy narrative is changing. For years, rolling blackouts defined the crisis. Today, even as supply reliability improves, households are discovering that cost is the new constraint.

“Availability was the first crisis. Affordability is the second,” says Crow. “And affordability hits households quietly, through monthly bills, municipal charges and peak-time pricing that people can’t easily avoid.”

Traditional electric geysers compound this problem by heating water during peak demand periods, amplifying costs for households while placing additional strain on municipal distribution networks.

Why hot water is the fastest pressure valve

Unlike large-scale generation projects or full residential solar installations, water heating upgrades represent one of the fastest and most accessible ways to reduce household electricity costs.
Smart and energy-efficient water heating systems can shift consumption away from peak hours, reduce overall demand and deliver meaningful savings without requiring households to overhaul their entire electrical setup.

“In many cases, improving how water is heated delivers a return in two to four years, faster than most residential energy investments,” Crow says. “Yet it remains largely absent from national conversations about energy affordability.”

A cost-of-living issue hiding in plain sight

For most South Africans, hot water is not a luxury. It is central to hygiene, health, and daily routine. As a result, households tend to absorb rising costs rather than reduce usage, making water heating a persistent and unavoidable expense.

The good news, Crow notes, is that this is one of the few energy challenges South Africa can address quickly and at scale. By improving how water is heated, through smarter controls, efficiency upgrades and renewable-ready systems, households can reduce electricity costs without sacrificing comfort, while municipalities benefit from lower peak demand and reduced pressure on local networks. In many cases, these upgrades deliver payback within two to four years, making them one of the fastest cost-relief interventions available to households facing rising tariffs.

“This isn’t about asking families to use less hot water or change their daily routines,” Crow concludes.

“It’s about modernising one of the most energy-intensive appliances in the home so it works better for today’s economic reality. If affordability is the defining energy issue of the year ahead, then solutions that deliver immediate household relief, rather than long-term promises, need to move to the centre of the conversation.”