The update on the roll-out of smart meters by the Public Accounts Committee (PAC) has reported that progress is currently too slow, and that the Department for Energy Security and Net Zero (DESNZ) has not done enough to ensure consumers are convinced of their benefits.
The PAC noted that at the end of March 2023, more than a decade after the roll-out started, only 57% of all electricity and gas meters were smart. While energy suppliers are currently installing 80,000 to 85,000 smart meters each week, they believe the remaining consumers with traditional meters are less interested in having one.
Another fact that will adversely impact the roll-out is that a huge number of smart meters will fail when 2G and 3G mobile networks are switched off. The PAC warned that an estimated seven million communications hubs (part of the electricity smart meters) will also need to be replaced, because they will lose functionality when the 2G and 3G mobile communications networks are closed.
In terms of networking, the PAC said a few hundred thousand homes sit outside the wide area network of coverage across Great Britain for smart meters. DESNZ told the PAC that the Data and Communications Company, which collects smart meter data, is thinking about piggy-backing on a consumer’s home broadband service. However, this will take some time to develop, and is one of a number of options being considered.
Another factor holding back the benefits of smart meters is that around three million (9%) are not working properly in total. The PAC reported that as of March 2023, 1.6 million of these experienced “transitory” issues, but the remainder were faulty, and either not sending energy use information to suppliers or not displaying usage to consumers – or both.
“Suppliers are supposed to take ‘all reasonable steps’ to replace smart meters that are not working properly, but the government’s roll-out targets mean suppliers have much clearer incentives to prioritise the installation of new meters rather than replacing broken ones,” the authors of the PAC report noted.
Consumers are only guaranteed for a year the benefits arising from being able to monitor their energy consumption in real-time – because if their display breaks after that, the supplier currently has no obligation to replace it.
While DESNZ recognises that the smart meter roll-out needs to at some point stop being a change programme, the PAC report said there remains significant demand among consumers that do not yet have a smart meter, which can be met through its ambitions out to 2025. However, the programme is only due to run until then, and DESNZ told the PAC it does not know when the programme will evolve from a roll-out to “business as usual”.
The PAC urged DESNZ and the Office for Gas and Electricity Markets to develop a plan to ensure suppliers assign more importance than at present to replacing those smart meters (and their in-home displays) not functioning properly. It also recommended that they set out a timetable for replacing the communication hub element of smart meters that will lose functionality when the 2G and 3G mobile networks are switched off, and put in place measures to ensure suppliers use future-proofed technology – for example, by excluding 2G or 3G connectivity – in all-new smart meter installations.
The PAC noted that, based on data between 2015 and 2018, the roll-out has benefited wealthier people, who are more likely to be able to purchase replacement appliances if their smart meter suggests relatively high running costs for the ones they own. The PAC also noted that special smart meter tariffs that offered lower prices, for example, for off-peak consumption, have been withdrawn due to current conditions in the domestic energy market, removing an incentive for smart meter installation.