What’s going wrong with the smart meter project?

It would be a shorter article if we were to discuss what’s gone right with the smart meter project; very short indeed.

From the outset, the rollout of smart meters across the UK has been plagued with problems. From meters going ‘dumb’ when suppliers are switched to problems with the hardware itself, it’s been one thing after another for gas and electricity suppliers who are trying to stay compliant.

According to Smart Metering Systems, who install smart meters on behalf of large energy suppliers, “There are 53 million gas and electricity meters in the UK and, as of the end of December 2018, there were 14.9 million smart and advanced meters installed in homes and businesses across the country,”. They’ve said they expect the rollout to continue into 2022 and maybe even 2023, but Ofgem have indicated nothing of the sort.

With SSE the first to be fined by Ofgem for failing to meet their obligations and various bodies calling for the deadline to be extended, we ask – what’s going wrong with the smart meter installation and isn’t it about time Ofgem extended that deadline?

One of the major barriers to smart meter installations is getting people to agree to them. According to a recent YouGov survey, around half of those who haven’t yet had a smart meter installed say they don’t want one at all.

E.On has suggested that receiving a smart meter should be an ‘opt out’ process, rather than something households have to opt into. Their political and regulatory affairs director, Sara Vaughan, spoke at a Westminster Energy, Environment and Transport forum on April 30th, noting that, in some cases, it was difficult for energy suppliers to encourage consumers to take up smart meters.

“We have got all the technicians we need, we have got all the installers, we can get out there and we can cover the country. The one thing we are having a problem with at the moment is getting through people’s doors and actually encouraging them to embrace this,” she said.

She went on to say that E.On hoped electric vehicles would help to engage people further, and that an opt out process would get more doors opened for installations.

Suppliers are being urged to pull out all the stops in order to meet the smart meter deadline of the end of 2020. Those who fail to comply risk action from the regulator, which at best could be investigation or at worst be a hefty fine.

Going on the outcome of the business smart meter rollout, a large fine is not out of the question. Back then, when E.Onmissed their target, they were slapped with an Ofgem fine that amounted to £7m .

SSE, who missed their target for smart gas meters by the end of 2018 were recently fined £700,000. Independent energy supplier Avro has been issued with a final order from Ofgem meaning that, from May 26th, they will not be able to take on any more customers unless they’ve caught up with their smart meter obligations.

However, rushing the installation doesn’t seem to be working either. As recently as April, some suppliers were still installing the SMETS1 meters in customers’ homes, due to an issue with the supply of SMETS2. According to the Telegraph ,only half a million SMETS2 meters had been installed by the end of March.

Although recent updates by the DCC now means allSMETS1 meters should be functional, these installations were in breach of Ofgem’s guidelines. A deadline of March15th was set by the regulator, after which time no more SMETS1meters should have been installed.

As with any activity that costs energy suppliers money, it’s the consumer who inevitably picks up the bill. Aside of the cost of the smart meter programme itself, any fines or administrative costs incurred by missing the target deadline will ultimately be paid for by the billpayers too. Ignoring the ill will and bad PR that this sort of situation will generate, there’s another cost to consider too.

Rushing the installation of smart meters has already meant some consumers feel ‘hounded’ or pressurised into taking the device. If that device doesn’t work as it should, as was the case with SMETS1until very recently, that consumer will be made even more disenfranchised with the whole initiative.

Smart meters offered a gold wrapped opportunity to encourage consumer engagement with their energy use and supply, but instead it seems that pressure from the government is going to end up turning them off. If Ofgem and the UK government want to get the most out of this (expensive) infrastructure project, then it’s high time they moved the deadline to a more reasonable date and gave suppliers more breathing room to get things right first time.

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