Smart meters are the energy gadgets being offered and installed in every household that wants one across England, Scotland and Wales by 2020.
By the end of the programme, which began in 2016, around 53 million smart meters will be fitted in over 30 million premises, according to the government – which is spearheading the scheme.
But providers, consumers and industry bodies have reported problems with the roll-out.
Moneywise explores what’s happened and looks at whether a smart meter is right for you.
The benefits
A smart meter is a tool (or tools if you have gas and electricity) you can have installed in your home – usually where your existing meters are – which sends automatic digital meter readings to your energy provider.
This means bills should be far more accurate than at present, when they are estimated, and it saves householders from having to submit their own meter readings.
On installation, you’ll receive an in-home display gadget detailing how much gas and electricity you’re using, as well as the cost. According to the government, this will help households to manage their energy usage better, save money, and reduce emissions.
Smart Energy GB – the company communicating the smart meter roll-out – adds that smart meters will enable households with prepayment meters to top up their energy online or over the phone rather than having to go to a shop (although they can continue to do this should they wish).
Another point to consider is that some suppliers are offering their cheapest average tariffs to customers who take out smart meters with them.
According to energy comparison site uSwitch, British Gas and First Utility’s cheapest tariffs are only available to households that take out a smart meter with them. These tariffs, which cost £916 and £995 respectively per year, are not available to those who already have a smart meter.
However, while they are the cheapest average annual tariffs offered by these suppliers, they don’t beat the current cheapest deal on the market open to everyone, which is £807 from Outfox the Market.
There have also been some major issues with the smart meter programme. Here are the five key problems.
1. Not all households can get a smart meter to begin with
Moneywise spoke to 11 energy providers, including the Big Six. We found that some are installing smart meters to priority customers to begin with – such as to prepayment meter customers – while others are rolling out meters area by area, which means you may need to get in the queue.
Other providers exclude homes with prepayment meters or solar panels, although by 2020 every household will have to be offered a meter – see the table below for full details.
For example, SSE says: “Where customers need a prepayment meter, have two rate tariffs such as Economy 7 or a more unusual or complex meter, there may be a delay in getting a smart meter installed.”
2. You may lose smart connectivity if you switch providers
While you can switch energy suppliers if you have a smart meter, many meters installed to date won’t send meter readings to your new provider, which means you’ll have to revert to manual meter readings and estimated bills until the problem is resolved.
The issue is that most providers have only installed first-generation smart meters – known as SMETS1 meters – and some of these can’t connect to the national smart meter communications network run by the Data Community Company (DCC). With British Gas, for example, SMETS1 meters will only continue to operate if you join from EDF, Scottish Power, Spark, SSE or The Co-operative Energy. Of the 11 providers we spoke to, only a few have begun trialling second-generation meters – known as SMETS2 – which will resolve this issue.
Only this month (January 2018), the Department for Business Energy and Industrial Strategy (BEIS) extended the starting point from which SMETS2 (second generation meter) installations will count towards suppliers’ targets from 13 July to 5 October, due to providers not being ready.
A BEIS spokesperson says: “We have taken this step to ensure that customers can continue to feel the benefits of smart meters and suppliers can be completely ready to roll out SMETS2. This will not affect the rollout of the programme, or the 2020 final deadline.
“Smart meters are a vital upgrade to our energy infrastructure and millions of people are already benefiting from them. They will provide accurate bills and save consumers £300 million in 2020 alone.”
Prior to the government’s SMETS2 extension, a spokesperson for Octopus Energy told Moneywise: “We are concerned that there are so many SMETS1 meters installed in the UK, which aren’t interoperable, and not a very long time period for SMETS2 meters to be rolled out.”
Energy regulator Ofgem says the DCC is planning to connect all SMETS1 meters to the network by mid-2019, but in the meantime, you’ll have to revert to manual meter readings and estimated bills.
Robert Cheesewright, director of policy and communications at Smart Energy GB, explains: “You can speak to your new supplier ahead of switching to find out whether your smart meter will be affected, but rest assured that you’ll always be able to switch, and if you have experienced some loss of smart functionality when switching supplier, this will only be temporary. Earlier smart meters [SMETS1] will be enrolled into the national communications network over the air, without the need for a visit from an engineer.”
3. You may experience delays in getting a smart meter
Households keen to have a smart meter installed may experience delays. Renewable energy provider Green Energy explains that as it’s a small energy provider, it needs to ‘piggy-back’ off Big Six orders for SMETS2 meters as it’s not cost- effective for manufacturers to supply the small number of meters it needs. Its chief executive, Doug Stewart, says he’s “hamstrung” by this reliance on larger companies making orders.
He explains: “There aren’t enough smart meters to go around and they’re slow to get hold of when you’re a smaller provider, plus there aren’t enough engineers to install them; we keep turning down customers. As an industry, I don’t think we’ve got a prayer of installing them by 2020.”
This worry of getting smart meters installed by 2020 is one echoed by other providers. British Gas’s parent company Centrica and Ovo Energy have both separately labelled the government’s target as “ambitious”.
A spokesperson for Scottish Power adds: “Due to the delays with the DCC becoming operational, the target dates will be a challenge for the whole industry.”
4. Energy bills may rise as a result
Centrica has called on the government to “address inefficiencies” in the programme to make it more cost-effective. It says the roll-out is “costly to implement” and adds “the equivalent of almost £40 on the bill of each Centrica customer”.
It also warns that forthcoming plans to cap energy bills could have “serious implications” for the smart meter programme, as it may result in there not being enough money to fund the rest of the roll-out.
5. Households pressured into to getting a smart meter
Households are being unfairly pressured into getting smart meters, according to complaints received by Citizens Advice, which runs the Chartered Trading Standards Institute (CTSI) helpline.
Issues seen by the CTSI include households being given so-called ‘deemed appointments’ – where suppliers say they’re coming to install smart meters without giving consumers a chance to opt out.
Other complaints include communications about smart meters omitting the fact they’re not compulsory.
As a result, the CTSI has written a letter to industry body Energy UK asking it to remind suppliers not to give the impression to households that smart meters are obligatory. The organisation is concerned suppliers may be breaching the Consumer Protection from Unfair Trading Regulations 2008.
Steve Playle, lead office for energy at the CTSI told Moneywise: “The industry is under great pressure to install meters by the 2020 deadline, but they’re slipping behind, and as such, they’re finding more and more ‘interesting’ ways to get people to sign up.”
The CTSI has the power to launch criminal prosecutions against rule breakers.
Victoria MacGregor, director of energy at Citizens Advice adds: "We are concerned that some companies are using aggressive sales practices to install smart meters. People have come to Citizens Advice for help because their energy supplier has said they’ll force entry to install a smart meter, or told them that they are required to have one.
"Smart meters are not compulsory and customers shouldn't feel pressured to have one installed if they don't want one.
"We appreciate that suppliers are under pressure to install more smart meters but they have a responsibility to act reasonably towards their consumers and not to use misleading or aggressive sales practices."
Moneywise has also seen reports of such behavior by energy suppliers. One text we’ve seen, which was sent to an Npower customer who wishes to remain anonymous, said that the provider was due to install a smart meter without the customer requesting one, and without stating that the scheme isn’t compulsory or how to opt out.
The text message says: “Hello! We are due to attend your property on behalf of Npower to fit Smart meters on 30/01/2018. Please call us today on [number has been blanked out by Moneywise] to confirm or rearrange your appointment.”
On raising this with Npower, it told Moneywise: “While smart meters bring many benefits to consumers, they are not compulsory and customers are not forced to have one. Customers who are offered an appointment but don’t want a smart meter can contact us to cancel their appointment.
“This specific message relates to a reminder to the customers who have not confirmed, rescheduled or cancelled an existing appointment. These are sent via SMS or email as part of the follow up process.
“When the initial appointment communications are sent via the customer’s preferred channel, they are given options on how they respond to the proposed appointment date and time, including the option to cancel the appointment.”
However, while Npower says the message is a follow-up text, the reader is adamant that it was the first communication they’d received on smart meters. About a week later they did receive a follow-up email from Npower, which again Moneywise has seen. While this did contain more information about smart meters, again it only gave the customer the opportunity to ‘confirm’ or ‘change’ their appointment – not to cancel it.
When we raised this issue of customers being pressured into getting a smart meter with energy regulator Ofgem, it told us suppliers must treat customers fairly and be “transparent and accurate”. However, it has no open investigations into domestic smart meter wrong-doing at the time of writing.
An Energy UK spokesperson says: “Energy companies are committed to meeting the government’s deadline of ensuring all households and businesses are offered a smart meter by 2020.
“Energy companies will be adopting various methods of communication with their customers to increase engagement and enable as many people as possible to experience the benefits that smart meters bring.
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