Smart meters - meters without the smart?

By OVO Energy Thursday 12 April 2012

Hard-pressed households may be facing yet another kind of energy bill because an upcoming launch of smart meters is going off the road.  They are meant to save us money, help us control our energy use and help the UK hit its environmental targets.  It’s now three years since the previous Government announced a national rollout of smart meters to every UK home by 2020 but the creation and nature of the installation program has suffered repeated delays and changes in direction.

The specification for smart meters, due last Autumn, was finalised last month by the Department for Energy and Climate Change (DECC) and they’ve sent it to the European Union to be approved.  The delays mean that right now, smart meters already installed and not to the anticipated sophisticated technical standard will need to be removed by 2019.  As a result the meters won’t last their certified life, which is just wasteful, the cost of buying them will be significantly higher for energy suppliers and some customers will have two meters installed within a short period.

For households with prepayment meters, there’s confusion because some meter manufacturers are only intending to offer smart capabilities once the next technical specification is published later in 2012/13, meaning existing ‘non-smart’ prepayment meters will be in place for longer.  We think smart meters should be provided to all consumers at the same time.

It’s been reported that at least two of the ‘Big 6’ suppliers have halted their smart meter trials due to some of these uncertainties.

On 5 April the Government announced its goal for 30 million homes and small businesses to have smart meters by 2019, but there’s a suggestion that smart meters could be optional (for suppliers who may not choose to offer them and for the public who may choose not to have one installed).  We think this makes little sense.  How will the UK meet its 2020 commitments to reduce carbon emissions if smart meters are optional, when our homes contribute almost 30% of the UK’s emissions?  Smart meters are likely to be more expensive for everyone, as new systems and meters will have to be paid for by a smaller number of customers - with the uncertainty leading to less investment by suppliers and less choice for you and me.

Switching suppliers is often a good way to get a better deal, but if you have a smart meter as part of a current trial and want to switch supplier before 2014, you’ll rely on the old supplier making information available to the new one - but there’s no incentive to do this quickly.  We’re likely to lose access to our smart data for a while following a change of supplier – or be put off from switching which could cost us more in energy bills.  While we think it’s right that consumers have control over who has access to their smart data (outside of what’s essential in order to bill and serve customers) we’ve suggested to DECC and Ofgem, the industry regulator, that smart meter installers should be made to provide smart data to new suppliers until a central communication body is set up to manage things.  Their suggested process may mean suppliers think it’s too complicated and administratively intensive and so the customer’s new supplier may only offer the ability to use the meter in a non-smart mode until at least 2014.

The Government is saying that energy suppliers will have to offer standardised IHDs (In-Home Displays) when installing approved smart meters.  From the evidence we’ve seen, we don’t think most people will use these regularly to reduce or change their energy usage, meaning they could be a huge waste of time and money.  We think it would be better to let households buy an IHD of their choice – or even receive the data on a smartphone or tablet app - creating competition and ensuring a greater chance of people using the piece of tech that’s right for them.

The Energy Retail Association (ERA), the industry body for the ‘Big 6’ suppliers, appears to have been tasked with creating the guidelines for installing smart meters.  We think the independence of the code is compromised as the bigger energy companies are being allowed to heavily influence it, despite someone from the DECC chairing the process.  We support the Which? ‘no selling just installing’ campaign and are pleased to hear the Government say that there should be no sales during the installation – although we require clarification on what they term as ‘marketing’ being allowed if the customer agrees.

We have concerns that the ability of the industry to educate the public about the rollout of smart meters could be damaged if everyone realises that the installation process is being controlled by companies that already suffer from tarnished reputations.  And negative press about smart meters themselves, including from the US, already seems to far outweigh the positive.

We welcome this month’s raft of proposals from DECC about the smart meter programme but until all of these factors are resolved, consumers will not have all of the information in order to decide, when the time comes, whether a smart meter is right for them.

Stephen Fitzpatrick, CEO and founder of OVO Energy wrote this article for the Huffington Post.

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