Blog Post

New research shows that Energy Suppliers are restricting tariffs for customers with smart meters

Richard Simmonds • May 27, 2021

New research released by Comparethemarket will make for some frustrating reading for Ofgem and those responsible for the smart meter rollout after showing that many energy suppliers are restricting what tariffs they offer to customers who already have smart meters.

Restricting tariffs

According to the research that analysed 223 tariffs available just 37 were available to households that already have a smart meter fitted.

The smart meter rollout has been beset with challenges since its inception and this latest research will do little to help suppliers get smart meters into their customers’ homes.

The smart meter rollout was meant to be completed by the end of last year, but that target was changed after it became clear that the industry could not achieve that target due to a combination of slow uptake and the impacts of the Covid-19 pandemic.

There are plenty of negative headlines around smart meters already so the fact that tariffs are being restricted to those with meters installed will do little to inspire confidence in those unsure whether to get a smart meter.

The report also showed that those with ‘dumb’ smart meters had 186 options to choose from but those with the SMETS2 meters were restricted to just 37 options.

There has been a lot of contention between suppliers and the regulator over getting the DCC connected SMETS 2 meters installed rather than older meters that often go dumb.

Around 4.6 million of the smart meters already installed are currently operating in dumb mode, many because they were not able to retain their smart functionality while switching to a new supplier.

Also read: Debunking the most common myths about Smart Meters

Higher energy bills

Delivering another blow to the rollout was a further finding in the research that energy prices for those with a smart meter are higher on average.

Annual prices for gas and electricity for people with smart meters was £1,089 whilst those without a smart meter was £1,071.

“The industry should be encouraging people who haven’t yet to switch to smart meters, but this does not seem to be the case with tariff variety and pricing. There needs to be more incentives to encourage people to switch, including competitive pricing.

“Smart meters are a useful tool to help people manage their energy consumption, but millions of homes are stuck with smart meters that operate in the same way that a traditional meter does, which doesn’t allow them to receive the full benefits promised.

“We need to see dedicated action to ensure these meters are soon enrolled into the smart systems and so that customers get the smart benefits and do not lose them when switching supplier,” said Peter Earl, head of energy at Comparethemarket.

Also read: Energy Suppliers under pressure to step up Smart Meter rollout in 2021- How not to alienate customers

New Targets

Energy suppliers will have to abide by new smart installation targets from July 1^st and a failure to hit them will result in them breaching their licencing conditions.

As such it’s in Energy suppliers’ best interest to encourage more customers to adopt smart meters and the findings of the Comparethemarket research shows that they have a lot to do. More flexible tariffs for smart meter adopters should be introduced, new offers and incentives need to be offered.

Also read: Are you ready for the new smart meter rollout obligations?

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