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Shifting the power dynamic with prepaid

With prepaid meters helping to reduce theft and debt it is clear that they have benefits for government organisations, but what about private property owners?

The ongoing challenges faced by the South African power utility have made the front page yet again. The lights are off, loadshedding is back and the country is facing the complexities of power outages and unpredictable service. However, it’s not all bad news, there are solutions that can help the flagging power utility recover its unpaid debt and get back on its feet, and one of them is the prepaid electricity meter.

Eskom has already recognised how prepaid meters can make a difference. With R18-billion in unpaid electricity bills from Soweto alone, the company is aiming to install more than 26, 000 prepaid electricity meters in the area by March 2020. The effectiveness of this solution has already been felt by the City of Johannesburg – the metro has claimed a 10% reduction in illegal electricity usage thanks to their use of prepaid meters.

With prepaid meters helping to reduce theft and debt it is clear that they have benefits for government organisations, but what about private property owners?

The Citiq Prepaid sub-metering system has been designed to put control back into the hands of property owners and their tenants. These meters never replace the prepaid metering systems for Eskom or the council, instead they add an additional layer of control which ensures all tenants pay fairly for what they consume.

Prepaid electricity meters help people better manage their budgets and help them to lower the amount of electricity they actually use. These solutions allow for deeper control over how power is used on the premises, the type of appliances that people invest in, and how they ensure that their bills are paid on time. It’s the latter that makes prepaid meters such a powerful tool in the country’s arsenal – people have to pay their bills to get their power.

“There is little doubt that visibility into a household’s energy consumption will make a big difference to monthly bills and usage,” says Citiq Prepaid Managing Director Michael Franze. “Sub-metering solutions can reduce average consumption by at least 15%, often much more, which makes such a difference to budgets and expenses. They can also help people identify which appliances are eating up power and when their usage tends to be the highest. They can then invest into appliances that are lower on energy usage and light bulbs and fixtures that have lower consumption rates.”

“The ability to keep the funds and payments administration separate from the relationship between tenant and owner is critical,” adds Franze. “With Citiq Prepaid, funds are collected from tenants upfront and kept in a trust account. We then levy an 8.75% handling fee to transfer the funds to the landowner who can then pay the municipality directly. There’s no altercation between tenant and owner around the bills or the usage, everything is transparent and upfront.”

Prepaid puts control back into the hands of the tenant as well. They no longer have to carry the costs of the fellow tenant who doesn’t care about their bills, nor do they have to comb through bills to ensure their accuracy, or endure variable billing periods. Costs are upfront, managed and precise. Tracking consumption from day to day, even from hour to hour, makes life easier and budgeting more realistic.

“The worldwide market for prepaid has been growing steadily over the past few years as more people recognise the benefits of pre-paying for services,” concludes Franze.

The statistics back it up. Navigant Research estimated that by 2024, the installed base of prepaid meters is expected to reach 85.1 million global households. This is driven by the benefits that it offers alongside growing global awareness of the value of power and the need to change bad practice to protect the environment.

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