How Successful Is the UK’s Smart Meter Project?

New legislation by the UK government in 2009 prepared the wayforthe installation of 53 million smart meters in British homes by 2020.  These smart meters are internet-connected devices which allow consumers to see their energy use at a glance – both in terms of volume and price. 

It was hoped that this would lead to savings for households since they would be able to reduce their energy use as a result of the real-time cost shown on the handheld device which is kept in the home.  Estimated billing would also be no longer necessary so this would enable UK households to budget their outgoings more effectively.  As the data about energy use is sent directly to the energy provider, employees would no longer need to visit homes to read the meter either.  It was predicted that these additional savings in energy suppliers’ administrative costs would also be passed onto consumers. 

Unfortunately, the plans for rolling out smart meters ran into problems from the start.  There were technical issues with the initial SMETS1 meters which were installed.  Many consumers reported that they didn’t work in areas with poor or no internet coverage.  Also, many lost their smart function when consumers switched energy providers. 

Although a new SMETS2 meter is ready to replace these meters (with a bespoke security network especially developed by the national security team at GCHQ), the £11 billion project is hopelessly behind schedule with just under a fifth of smart meters installed (11 million) and little chance of catching up by next year.

Another unexpected development has been British consumers’ resistance to having a smart meter installed.  Nearly half questioned in a recent survey said that they had reservations about the security of these devices.  This is perhaps a misunderstanding of the technology involved since the meters don’t allow hackers to access consumers’ personal data.  This misconception is perhaps the fault of not properly informing consumers and points to major faults in the government’s £224-million information campaign.  

A quarter of Britons surveyed said that they were reluctant to have smart meters installed as they didn’t believe that they would see savings.  They might be right.  Although the smart roll-out was intended to save UK households an average of £26, the latest research by the parliamentary NAO (National Audit Office) would tend to suggest that savings might be as low as £11-£18 a year. 

There are also concerns about the additional functions added to the second-generation smart meters.  Although they aren’t yet operational, one function that especially worries consumer protection groups is the possibility of using smart meters to implement surge pricing.  In other words, energy would be priced according to overall demand rather than usage. 

Nowadays, everything about money matters can worry householders struggling to get by.  They look for opportunities to make savings from the best insurance UK to grocery bills.  It would be ironic if a device intended to help them reduce energy bills ended up costing them more money.