Smart meters to save energy suppliers eight times more than consumers, U.K. consumer body claims


Hertford, U.K. — (METERING.COM) — August 3, 2009 – The United Kingdom government should not saddle consumers with the multi-billion pound bill for the rollout of smart meters, which will save the energy industry far more than its customers, the influential consumer advisory body Which? has urged.

According to Which? the average household will make an annual saving of just £1.43 from a smart meter, equating to a saving of £36.75 million for all of the U.K.’s consumers. However, the energy industry will save more than eight times that amount at £306 million a year. Yet, under the government’s plans, consumers alone will foot the bill for installing smart meters in homes.

“We don’t see how the government can justify asking consumers to pay for something that will save energy companies hundreds of millions a year, while the average household will make only minimal savings,” says Which? energy campaigner, Fiona Cochrane.

In a smart meter briefing, “Not so smart meters?” Which? says that smart meters will not automatically mean cheaper bills. While smart meters will result in more accurate bills, they will not provide the information people need to manage their energy usage and cut their costs. This information will only be available to consumers if portable wireless energy monitors are rolled out alongside smart meters.

Which? also questions the “central communications” rollout model preferred by the government, based on the creation of a nationwide communications hub managed by a single communications provider, through which information about energy usage will be communicated from each household to their energy supplier. For example, how will the central communications hub be established, how will it be governed and how long will it take before it is fully functioning?

An alternative proposal, and one which is more likely to provide choice and value for money to consumers is to encourage competition at all stages of the smart metering process. However, the “competitive model” was considered but rejected by the government. Energy suppliers would be free to decide upon their own meter deployment strategy and metering functions, and would be able to contract out the management of these services should they wish to. The market would be open to new entrants to provide the best possible service and price to consumers and to suppliers. Further, by removing the need to set up a central communications hub, the rollout could also happen faster.

Which? says that smart meters have the potential to deliver real advantages for consumers and energy suppliers alike. However, to make this happen the government needs to mandate a rollout of wireless energy visual display monitors to every household, develop minimum standards for smart meters and units and ensure that consumers don’t end up paying more. “Only then will we all see the true benefits of being smarter.”

However, the Energy Retail Association (ERA) has labeled the Which? report as being misleading from start to finish.

“By ignoring in its calculations the assumption that customers will be able to save money once they have a smart meter, Which? misses the point of installing this new technology in the first place,” says the ERA in a statement. “The government’s own figures and those of other countries around the world have clearly indicated the benefits to customers of being more informed about their energy use.”

The ERA continues that it and its members firmly believe that energy companies should not be restricted to providing a “one size fits all” solution, but should be allowed to innovate and offer customers precisely the kind of display they would find most useful, whether this is with a display unit, via a website, or even through a mobile phone application.

“Providing customers with detailed information on the energy they are using has always been the cornerstone of the industry’s approach to smart metering. For Which? to suggest otherwise is absolutely disingenuous.”