14 May 2013

Smart meter roll out delayed

The DECC announced a 15 month delay to the start of the smart meter replacement program valued at £11.7bn. We think that's a good thing.

The DECC announced that the £11.7bn project would now start in Autumn 2015 rather than Summer 2014 to allow more time for suppliers to sort out the communications infrastructure and enable a smooth transition.

So, why would I want a Smart Meter?

• Convenience – no more meter readings which should also drive savings as there would be no need for the existing army of meter readers.
• Accurate bills, with your readings uploaded daily there's no reason not to get the bill right. You should still be able to choose whether to pay for what you've used or have a budget plan to ease the winter bills by paying a bit more in summer.
• Access to your own usage so you can better manage energy use.
• And lower bills? Well maybe, but not necessarily at the moment!

First:Utility at least seem to be trying to claw back the money they invested in early adopters of smart meters. A quick quote through the MoneyMaxim Energy Comparison Service shows First:Utility's Smart Homes Variable V2.0 tariff costs over 26% *1 more than their iSave v15 tariff, that's nearly £320 for a standard usage consumer. You'd have to alter your usage behaviour an awful lot to recoup that cost.

Energy companies have been handing out energy monitors for electricity usage for years or you can buy your own. They don't communicate with your electricity supplier so won't prevent estimated bills and you'll still have to supply readings and let the meter reader in occasionally. They are good for helping you monitor your usage and identify which electrical appliances are costing you the most to run.

At the moment, if you've had a smart meter fitted and change supplier, you lose all the benefits and indeed so does the energy supplier. From the end of this year, energy companies won't be allowed to replace a smart meter with an old fashioned dumb one. They might still need to replace the meters as there are still huge differences between the technologies and there isn't yet a clear standard for them. Even if they don't have to replace the meter, technically it would still be owned by the energy supplier that installed it so there might have to be some rental arrangement between energy suppliers. It would be a disaster for competition if ownership of the meters restricted the ability of the consumer to switch supplier.

So we welcome the delay and hope that when the roll out comes, the benefits for the consumer are central to the project.

*1 A "standard usage” customer in the Southern area using 3,300kWh electricity and 15,50KWh gas would pay £1189.34pa on the iSave v15 tariff and £1508.20pa on Smart Homes Variable V2.0 making the Smart Meter tariff 26.8% or £318.86 more expensive.