ZAR100 billion. Take a moment to digest that. At the end of the 2024–2025 financial year, that’s how much municipalities owed South Africa’s power utility, Eskom. The exact figure was ZAR98.5 billion… but who’s counting?

Well, the South African Treasury is, for one. In 2024 it formulated a plan to claw back that revenue, announcing a three-year ZAR2 billion grant to defaulting municipalities to help them roll out smart prepaid meters to households and businesses.

‘Municipalities typically generate most of their revenue from electricity sales, but these have been adversely affected by various challenges, including a consumer culture of non-payment for services. This has been financially crippling for many of South Africa’s municipalities,’ says Nicholas Maweni, CEO of Munsoft, a supplier of financial management software to local municipalities

‘The large-scale roll-out of smart prepaid meters will allow municipalities to recoup some of their funds and combat the damaging culture of non-payment,’ he says.

Smart meters, which unlike traditional metering systems, offer two-way communication, enable municipalities to detect tampering; limit the electricity load that can be drawn (in times of constrained supply from Eskom); turn power on and off; and, in municipalities that allow it, register distributed energy produced by, for example, home solar panels and exported to the grid. In addition, smart metering enables flexible tariff systems, with users being charged more for electricity used at peak times.

The case for smart prepaid meters in improving revenue collection was reinforced in 2022 when Johannesburg’s City Power improved revenue collection by ZAR33.63 million after installing 40 000 split meters in Soweto. Split prepaid meters are considered to be tamper-proof as the keyboard the consumer uses to punch in their prepaid token is separate from the meter itself.

IoT Analytics’ most recent Global Smart Meter Market Tracker 2020–2030 highlights the continent as one of the regions with high-growth potential for smart meters – a polite way of saying it has a lot of ground to make up. Internationally, smart device installations topped 1.06 billion in 2023, and North America, accounts for a big portion of those, with a 77% penetration rate.

According to a new SkyQuest Technology market report, the smart electricity meter market alone is poised to grow at a compound annual growth rate (CAGR) of 8.1% from US$19.7 billion in 2024 to US$35.74 billion by 2032. South Africa’s energy management market is growing at a similar rate (8.85%), according to Statista.

Last year, the National Treasury issued a RT29 transversal contract covering the audit and conversion of existing prepaid meters and the supply, delivery, installation, management and maintenance of smart metering solutions for a period of 36 months.

Among the beneficiaries of the smart meters grant is the Northern Cape’s Sol Plaatje municipality, which includes Kimberley and surrounds. As of September 2024, the municipality owed Eskom in excess of ZAR1 billion for bulk electricity, representing 20% of the total ZAR5.2 billion owed to the utility by the province.

‘Smart metering technology allows the municipality to improve the revenue management capability and remedy electricity losses. It benefits the consumer and the municipality by putting the management of the utilities in the hands of the consumer, thereby eliminating interim and unpredictable billing,’ municipality spokesperson Thabo Mothibi told a local newspaper.

Towards the end of 2024, the municipality reported that it was on track to complete the installation of 13 000 smart prepaid meters by the end of March 2025.

Meanwhile, Kenneth Samolapo, the municipality’s acting CFO, said work on the large power user (LPU) account reconstruction has enabled the municipality ‘to recover a considerable amount of lost revenue from electricity’, allowing it to service its debt with Eskom.

That reconstruction work is being under-taken by Gauteng-based Macrocomm, one of two partners – the other is Ontec – working with Vodacom, the main RT29 contractor in the Sol Plaatje roll-out.

‘Our primary focus is revenue protection, revenue enhancement and revenue recovery aligned with the financial needs of business and government entities,’ says Macrocomm’s group CEO, Sivi Moodley.

‘Through our innovative approach, we offer a unique platform for effective management of water and electricity resources, benefiting all parties involved,’ he says.

The process starts with an extensive audit of existing advanced metering infrastructure (AMI), replacing broken meters and ensuring that all meters are automated meter reading (AMR) compliant.

‘The use of our advanced AMR system provides municipalities with accurate, real-time data, allowing for a seamless and transparent mechanism for an improved municipal management of LPU accounts,’ says Moodley.

The benefit of real-time data analysis is twofold, helping municipalities recover lost revenue and providing reliable and accurate electricity consumption billing to their residents. By using data analysis to identify specific areas of lost revenue, municipalities are able to devise a targeted intervention plan before the situation gets out of control.

MTN Business is another preferred service provider listed in the Treasury’s R29-2024 transversal contracts.

‘Our smart meters track energy consumption in real time, which allows businesses and municipalities to optimise their usage, prevent waste, reduce costs and minimise their carbon footprint,’ says Sudipto Moitra, general manager of MTN Business.

‘Clients can monitor their energy usage in a way that was simply not possible with traditional systems,’ he notes. In addition, a tamper-detection feature sends instant alerts if any unauthorised interference occurs, minimising potential losses.

The system is also scalable, serving small businesses as well as municipalities. And by drawing the attention – of consumers as well as producers – to their consumption patterns, the system highlights sustainability. ‘It’s about creating smarter cities and a sustainable future for everyone involved,’ says Moitra.

Writing in Infrastructure News, Francois Conradie, technology sales engineer for Remote Metering Solutions, explains that ‘smart metering has a societal impact on individual consumers’.

‘It empowers households to monitor and control their energy consumption in real-time, fostering a culture of energy awareness and responsibility. This contributes to a more sustainable lifestyle and supports broader environmental conservation efforts,’ he writes.

‘With the rise of the internet of things [IoT], artificial intelligence [AI] and big data, we’re in a new era for residential and commercial energy management. The future of energy monitoring technology holds exciting possibilities, such as the potential to communicate with other gadgets throughout the home, via IoT, finding savings for consumers without them even noticing.’

On a bigger scale, the City of Cape Town (with about 860 000 electricity customers) announced last year that it was kicking off a programme to replace outdated (post-paid) credit and prepaid meters with advanced smart prepaid meters. (The programme is separate from last year’s mad dash by municipalities countrywide to update the software of existing prepaid meters to avoid a date roll-over snafu.)

‘Our meter replacement programme is beneficial for residents. The new meters help with managing costs, ensure accurate readings and assist residents in controlling and monitoring usage,’ the Mayoral Council member for energy, Xanthea Limberg, told IOL. ‘They also allow eligible residents to switch to the affordable lifeline tariff, which includes free basic electricity.’

Besides ensuring payment and accurate billing for electricity consumers, the city’s  AMI also allows businesses and households generating their own electricity through renewable resources to be compensated for any energy they feed back into the municipal grid. In 2023, it became the first metropolitan area in South Africa to allow businesses – and households, from 2024 – with small-scale embedded generation (SSEG) systems to sell their excess power back to the city.

As at February 2025, almost 2 000 small-scale power generators were participating in the city’s Cash for Power scheme, earning back ZAR55 million by 31 January 2025.

‘We are on track to double earnings in 2024/25 compared to the first year of our programme,’ says Mayor Geordin Hill-Lewis. ‘We will buy as much excess power from Capetonians as they are able to sell us.’

The use of smart metering is also helping the city keep its own energy bill down, with the Smart Facility app capturing data from municipal buildings. According to the city, ‘Smart Facility illustrates the data on several dashboards to facility managers and management staff for proactive monitoring and management of facility consumption.’

The concept of an interconnected system of smart devices is at the heart of the South African Smart Grid 2030 vision, developed by the South African National Energy Development Institute (Sanedi), with input from industry representatives in the South African Smart Grids Initiative (Sasgi). Sasgi’s vision is for ‘an economically evolved, technology-enabled electricity system that is intelligent, interactive, flexible, effective and efficient, and will enable South Africa’s energy use to be sustainable for future generations’.

The journey towards a ‘smarter’ South Africa is a long one, but we are getting there, one smart meter at a time.

By Robyn Leary
Images: Gallo/Getty Images