kVA and maximum demand charges in Gauteng

On a business tariff that bills demand, the kVA charge (the demand charge) bills the highest average demand your site drew in any half-hour slot of the month, in kVA. The slots are fixed: 12:00 to 12:30, 12:30 to 13:00, and so on. On the main Gauteng business tariffs a kVA costs about R290 to R460 a month in 2026/27, excluding VAT; the comparison by municipality is near the end.

It is usually high for one of four reasons: several loads running in the same half-hour, a poor power factor, everything restarting at once after an outage, or a tariff that still remembers an old peak. Find the half-hour, spread the load and fix the power factor before you look at solar or batteries.

What is the kVA charge on my electricity bill?

The kVA charge is the price of the network capacity your peak takes up, billed per kVA of your highest half-hour. It appears on the bill as a demand charge, “maximum demand” or a line in kVA, separate from the energy you use in kWh.

Three units matter:

• kW is real power, the part that turns motors and heats ovens.
• kVA is apparent power, the total the network has to carry to deliver those kW.
• kWh is energy: kW multiplied by hours.

Power factor is kW divided by kVA. Motors, compressors and some lighting draw reactive current that does no work but still loads the utility’s cables, so the network bills kVA. A site drawing 100 kW at a power factor of 0.80 is billed for 125 kVA. The glossary explains it in more detail.

The meter averages demand over each fixed half-hour slot. The highest slot of the month, among the slots your tariff counts, is your maximum demand. A two-second start-up surge does not set it; three compressors running together for a whole slot does.

Some bills carry a second kVA line. Ekurhuleni’s network access charge and Eskom’s network capacity charge are priced on the highest demand of the past twelve months, or on your notified maximum demand, not on this month’s.

What does the half-hour that sets the bill look like?

Figure 1 is a real day from a business we metered in Ekurhuleni, on Tariff E, for twenty days in August and September 2026. Wednesday 9 September held the highest half-hour of those twenty days.

Figure 1. Power and power factor through the heaviest metered day

The shaded area is the total power drawn (kVA); the navy line inside it is the part doing useful work (kW). The outlined column is the highest half-hour slot of the twenty days, the figure a demand charge is billed on. Below it is the power factor through the same day, with Ekurhuleni’s 0.85 reactive threshold and a 0.95 correction target. Source: Focal Energy site metering, 5-minute readings.

Table 1. The peak half-hour, 12:30 to 13:00

The charge follows the slot, not the spike. The highest 5-minute reading was 139.7 kVA at 11:35, and it did not set the maximum. Nor did the 30 minutes from 12:20 to 12:50, which averaged 133.2 kVA but straddle two slots. The 12:30 to 13:00 slot averaged 131.7 kVA, and that is the figure a demand charge uses.

A fifth of that demand came from the power factor. At a power factor of 1.0 the meter would have recorded 105.7 kVA, not 131.7. The difference, about 26 kVA, costs R4,473 a month in demand charge alone.

The power factor stayed between 0.71 and 0.88 all day. Correcting it to 0.95 would have taken about 44 kVAr in that slot and brought the peak down to 111.3 kVA: 20.4 kVA less, worth about R42,200 in the first year and about R70,400 a year once the network access charge catches up.

Why is my kVA so high?

Usually one of these six things sets it:

1. Loads that start together: compressors, ovens, chillers, pumps, welders and electric-vehicle chargers may each be manageable alone, but starting them in the same slot sets the month.
2. Restarts after an outage: when power returns after load shedding or a network fault, motors, geysers and cooling systems all start at once. The first hours after supply returns are a risk period for a new peak, so bring loads back in stages.
3. A poor power factor: at 0.80, a fifth of the kVA on the demand line comes from the power factor, not from work.
4. A tariff that remembers an old peak: if the charge did not fall when you used less, look for a rule that carries past peaks forward (see the comparison near the end).
5. A notified maximum demand set too high: where capacity is charged on the notified figure, you pay for it even if you never use it.
6. Billing and metering errors: the billed kVA should match the highest half-hour on your meter’s load profile, and the rate should match the published tariff. Estimated readings and a wrong current-transformer ratio both produce demand that never happened.

To check a bill, get the 30-minute load profile from the utility or your own meter. Compare the billed kVA with the month’s highest slot and the rate with the tariff, then note when the peak happened, the power factor at that moment, and whether an outage came just before it.

How do I reduce my maximum demand?

Start with what costs least:

1. Find the half-hours: a year of 30-minute data, or a few weeks of 5-minute metering, shows when the peaks happen and what was running.
2. Stagger starts and set priorities: sequence big loads, delay what can wait, and restart in stages after outages. A maximum demand controller does this automatically, switching off agreed non-critical loads when a slot heads over a set point.
3. Correct the power factor: an automatic capacitor bank sized from measured reactive power, or a solar inverter’s reactive setting (below), narrows the gap between kW and kVA. Plug-in “power saver” units sold for homes do not do this for a business.
4. Move loads out of the slots that count, where your tariff ignores off-peak hours.
5. Then consider solar and batteries, which work on the demand line in different ways.
6. Review your tariff and notified demand last: both are slow to change.

What each kVA is worth depends on your municipality: Table 3, near the end, puts a rand value on 10 kVA for each.

Can solar reduce my kVA charge?

Yes, in two ways. Its output lowers the kW your site draws from the grid, and a correctly set-up inverter also brings your power factor closer to 1, which lowers the kVA further.

The first depends on sunshine in the half-hour that sets the bill. Across our operating fleet, solar typically reduces billed demand by about 10%, in a range of roughly 5 to 25%. We leave that out of business cases, because one cloudy half-hour can set the month’s figure, and solar does nothing for a peak before sunrise or after sunset. Where only peak and standard hours count, as in Ekurhuleni, the odds are better than where every slot counts.

The second has to be set up. A grid-tied inverter can supply reactive power (kVAr), through its power-factor setting or a controller that holds the power factor at the utility meter. That brings the measured power factor closer to 1 and lowers the kVA in every slot the inverter runs.

Left at its default setting, an inverter supplies kW only. Your motors’ reactive power still comes from the grid, so the measured power factor drops as solar takes over the kW. That does not add kVA: the reactive part stays the same size, so the kVA still falls with the kW, just by less than it could.

Make sure your solar provider has accounted for power-factor correction in the design and set it up at commissioning. It is often overlooked, because it does not benefit the solar provider: the saving shows up on your demand charge, not in the system’s output. It is one of the commissioning checks in our guide to choosing a solar EPC partner.

There is a trade-off. An inverter’s limit is apparent power, in kVA, so reactive power supplied at full output reduces the kW it can deliver: available kW = √(kVA rating² − kVAr²). A 100 kVA inverter supplying 44 kVAr at full sun can deliver at most 90 kW. At part output there is spare capacity and the cost is small.

On a demand tariff the trade usually favours reactive support, because each kVA removed from the peak slot is priced for the month, and sometimes for a year. But every site is different: judge each case on its own tariff, load profile and inverter size. At the site in Figure 1, the peak half-hour fell at 12:30, inside the solar day: about 44 kVAr from the inverters would have lifted it to 0.95 and taken 20.4 kVA off the peak, before counting any kW from the panels.

Can a battery reduce my kVA charge?

Yes, if it is sized and run for demand. A battery set up for peak shaving discharges into the slots that would set the maximum, so the meter never records them. It needs enough energy (kWh) to last through the peak and enough power to cover the excess above your target. At a poor power factor that power is more, in kW, than the kVA it removes, unless the battery’s inverter also supplies reactive power: at the site in Figure 1, removing 20.4 kVA with real power alone would take about 27 kW.

Four things decide whether it works:

• It has to win every month: one missed slot, from a fault, a flat battery or a longer peak than planned, sets the charge.
• A battery charged from solar is often empty when a morning peak arrives, so if your peak comes early it must hold energy back for it.
• Charging from the grid at night can set a new peak where every slot counts. Limit grid charging so the site never draws more than its peak without the battery.
• Charging must stay inside your connection’s capacity and notified demand, and discharging inside your export permission.

A battery also provides backup and shifts energy from cheap hours to expensive ones. Those jobs compete for the same stored energy, so decide which comes first before sizing it.

What is notified maximum demand, and what happens if I exceed it?

Notified maximum demand (NMD) is the capacity, in kVA, you have agreed in writing with your supplier to have available at your connection (see the glossary). Every Eskom-direct business has one; municipal customers mostly deal with the rules in the comparison below instead.

On Eskom’s rules:

• Exceeding it: two small exceedances, of up to 5%, are tolerated in any twelve months. After that, or for any larger one, you pay an excess charge on the kVA above your NMD, multiplied by the number of times you have exceeded it, and your capacity charges reset to the new high for a year. Paying does not buy the capacity.
• Reducing it: you need twelve months’ written notice, or at least three with a good reason, and you cannot go below your past year’s highest demand without one, such as new load-management equipment.
• Solar, batteries and power-factor correction do not lower it on their own: the notified figure must still cover the day that equipment fails.
• Choosing it: base it on a year of 30-minute data, allowing for growth and for the loss of any solar, battery or correction equipment. Capacity above that is paid for and never used.

How is kVA billed in Johannesburg, Tshwane and Ekurhuleni?

Each utility prices a kVA differently, counts different half-hours and treats past peaks differently. Table 2 compares the main business demand tariffs.

Table 2. Demand charges on the main Gauteng business tariffs, 2026/27, excluding VAT

Sources: City Power’s approved FY26/27 tariffs; City of Ekurhuleni’s signed 2026/27 schedule (provisional while its High Court review runs); City of Tshwane’s 2025/26 gazette plus the 8.80% increase (its 2026/27 electricity gazette had not been published when we checked on 25 September 2026); Eskom’s Schedule of Standard Prices 2026/27. City Power also adds surcharges to business accounts. Full rate tables: City Power, Ekurhuleni, Tshwane. Smaller business accounts on flat or block tariffs have no kVA charge.

Two things in the table decide what works for your site. The first is which slots count: in Ekurhuleni, load moved to off-peak hours stops counting, while in Johannesburg and Pretoria every slot counts, so moving load to the night only helps while the night’s peak stays below the day’s. The second is memory: a lower peak shows up on the next Tshwane bill, but in Johannesburg and on the East Rand an old peak can hold the charge up for as long as a year.

Table 3. What 10 kVA less is worth a year, 2026/27, excluding VAT

Arithmetic: 10 kVA × the rate in Table 2 × 12 months. A tariff that remembers past peaks delays the saving.

If you would like your maximum demand read from your own interval data, talk to us.