Energy firms fighting losing battle over smart meter rollout, Which? warns

Large energy suppliers would need to triple the current rate of smart meter installation to hit a target of replacing all existing meters by 2020, according to new analysis from Which?.

The consumer champion found large suppliers would need to work around the clock, installing 30 smart meters per minute, every day, for the next two years, to fully replace the 46 million existing meters their customers have and meet their targets as part of the £11 billion roll-out.

According to Which?’s analysis large energy suppliers are currently installing just 9.7 meters per minute.

With just over two years to go until the 2020 deadline, the consumer champion is concerned that delays and subsequent increased costs will result in reduced savings for consumers. Government estimates for the expected savings for an annual dual fuel bill in 2020 have already fallen from £26 to just £11.

So far, large suppliers have installed more than 11 million smart meters, however this is just a quarter (25%) of the 46 million existing meters that could potentially be replaced.

In February Which? found large energy companies would need to install 24 smart meters per minute to meet the deadline. But rather than speeding up the rollout, recent analysis by the consumer champion reveals a slowdown in smart meter installations.

Up to 53 million smart meters, designed to replace traditional gas and electricity meters across homes and businesses, are due to be installed across Britain by the end of 2020. Large energy suppliers are responsible for rolling out smart meters to 46 million of them.

Energy suppliers maintain that they will meet the 2020 target, but as the deadline draws closer, Which? believes this is looking increasingly unlikely and more must be done to ensure that all consumers are offered the opportunity to benefit from upgrading to a smart meter.

Dubbed as the “next generation of gas and electricity meters,” smart meters provide customers with an accurate reading of their energy usage and automatically send this information to suppliers – potentially meaning an end to meter readings and estimated bills.

However, the rollout has been plagued with problems from the outset, including faulty in-house display monitors and meters that were no longer compatible when customers switched energy suppliers.

Smart meters are expected to save consumers money and produce economic benefits of around £16.7 billion. However a previous National Audit Office report stated that these estimated benefits are based on the assumption that smart meters are rolled out to virtually all consumers by the end of 2020.

Alex Neill, Which? Managing Director of Home Products and Services, said:

“The smart meter rollout has been plagued by problems and been massively delayed, the benefits have been overstated and the savings they could bring consumers are at risk.

“Therefore it’s time for the Government to replan with industry and consumer groups to ensure people get the maximum benefit at the minimum cost.”

Notes to editors:

Large Energy Suppliers (14) as of 30 June 2018 according to BEIS, relates to energy suppliers with 250,000 customers or more – British Gas, Bulb, Co-operative Energy, E.ON, Economy Energy, EDF Energy, First Utility, Hudson Green Star, Npower, Ovo Energy, Scottish Power, SSE, Utilita, Utility Warehouse.

Large energy suppliers will need to install 30 smart meters per minute, around the clock, every day of the week, to meet the 2020 deadline according to Which? calculations based on data from the BEIS Smart Meters, Quarterly Report to end June 2018.

BEIS cost-benefit analysis estimates savings of £16.7 billion through reduced energy use, £47 on the average bill, by 2030.

BEIS, ‘2016 Cost Benefit Analysis’, p13.

In February 2018, Which? found large energy suppliers would need to install 24 meters per minute to meet the 2020 rollout figure.

On Friday 23rd November 2018 the National Audit Office is set to publish its findings from a review into the smart meter rollout.

National Audit Office ‘Update on preparations for Smart Metering’ report – 05 June 2014.

The expected dual fuel saving in 2020 is taken from the British Infrastructure Group (BIG) report, ‘A comprehensive investigation into the roll-out of energy smart meters‘, published in July 2018, page 7.

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