Smart meters have a significant role to play in managing the UK’s future energy usage by allowing consumers to control and manage their electricity consumption. Far from imposing additional burdens on bill payers, smart meters give consumers more control over their energy use, end estimated energy bills and make it easier to switch suppliers. This is especially important given the cost-of-living crisis and increased energy bills exacerbated by Putin’s invasion of Ukraine.
The Government wants to ensure all households and small businesses can benefit from smart meters. In June 2020, a new four-year policy framework was confirmed with fixed annual installation targets for energy suppliers that will continue to drive the investment and momentum needed to achieve this goal. This framework has been implemented and is now in effect. I understand that the new four-year framework applies to all domestic and non-domestic energy suppliers, in line with the existing rollout obligation. You may be interested to know that as of September 2023, 30.3 million smart and advanced meters in homes and businesses across the UK.
However, a number of constituents have reached out to me with a number of different concerns around this rollout, particularly because of the introduction of the Energy Bill. I want to dispel any confusion and shed light on the benefits and misconceptions surrounding smart meters.
First, I can assure you that there is no upfront charge to domestic consumers for having a smart meter installed. Energy suppliers recover their costs from their entire customer base, just as they do with traditional metering. Metering costs represent a small proportion of customers’ energy bills.
Smart meters are bringing an end to manual meter reads and estimated bills, enabling prepayment customers to top-up remotely without leaving home, and providing consumers with near-real time information which they can use to save energy and cut their bills. There is robust evidence from the rollout to date that consumers are achieving sustained savings using their smart meters and In-Home Displays of 3% for electricity and 2.2% for gas credit. This is particularly beneficial at a time of rising global gas prices.
A common concern when it comes to the installation of smart meters is the cost of installation. This is actually not the case and rather there is no upfront charge to domestic consumers for having a smart meter installed. It is the energy suppliers, not consumers, bear the initial cost. Instead of passing this expense directly onto you, they recover these costs over time from their entire customer base, much like they have done with traditional metering for years. Importantly, the cost of metering represents only a fraction of your energy bills. Furthermore, there is convincing evidence that users of smart meters are saving 3% for electricity and 2.2% for gas credit. This is particularly beneficial at a time of rising global gas prices.
One of the most significant benefits of smart meters is the end of manual meter readings and dreaded estimated bills. With smart meters in place, they provide you with near-real-time information on your energy consumption, putting the power back in the hands of the customer, which can help reduce your energy usage effectively and cut down energy bills. And for prepayment customers, smart meters allow for the top up your energy supply remotely without even leaving home.
Recently, there have been discussions regarding the potential criminalisation of certain aspects of the Energy Bill. It is essential to clarify that the New and Replacement Obligation (NRO) was already in place as part of Ofgem's Smart Meter Rollout. This obligation requires energy suppliers to take all reasonable steps to install a compliant smart meter (SMETS2 meter) whenever a meter is replaced or installed for the first time. The Energy Bill does not alter this obligation; it merely extends the period for its implementation, allowing the UK's smart meter rollout by the 1st of November 2028. This is the most significant change that the Energy Bill has concerned with smart meters; much of this was previously established as a part of Ofgem’s Smart Meter Rollout: Energy suppliers Rollout Delivery Open Letter from March 2022.
I can assure you that customers are not obligated to have a smart meter, but suppliers must install SMETS2 meters whenever possible. Suppliers are responsible for identifying reasons for non-SMETS2 meter installations and resolving any issues. They are required to take all reasonable steps to ensure SMETS2 meters are installed. We expect suppliers to handle objections and track reasons for non-SMETS2 installations to address key issues. If a non-SMETS2 meter is installed, suppliers must provide evidence demonstrating why it was in the customer's best interests. This responsibility rests with the supplier, not the customer, who can choose not to accept a smart meter installation offer. To increase smart meter coverage, the Government will consider consumer-oriented policy measures. If a supplier fails to meet installation targets, Ofgem may take enforcement action in line with its guidelines.
Regarding your personal data and privacy from smart meters and privacy, I can reassure you that smart meters cannot be used to invade your privacy. A smart meter does not share personal information that could identify you, such as your name, address, or bank account details. The only information your smart meter holds is how much energy you have used. And this information can only be shared with your energy supplier to allow them to prepare an accurate bill, and they cannot share this further without your permission.
For further information, I suggest visiting the Government’s page, Smart meters: a guide for households:
https://www.gov.uk/guidance/smart-meters-how-they-work
Smart meters are a vital tool in our journey toward a more efficient and cost-effective energy future. They offer tangible benefits to consumers, from cost savings to real-time data access and remote top-ups, while also contributing to our broader environmental goals. I am committed to addressing your concerns and ensuring that the rollout of smart meters is smooth and beneficial for all constituents.
Thank you for your trust and engagement in this crucial matter.