The Daily Telegraph - Saturday - Money
PERSONAL ACCOUNT
Smart meters won’t bring an end to the muddle of estimated energy bills
Idon’t think it will be very long before more householders, like me, question the point of their smart meters and demand to know why as a nation we’re spending £11bn installing them.
So far almost five million have been installed, with the aim that 26m homes will have them by 2020.
Yet a survey published last week by Smart Energy GB – the body set up at some considerable expense to promote the rollout of these devices – revealed that two in three people don’t know what they are. That’s despite a marketing budget of around £25m to spread the word.
If you are among the majority still to be enlightened, let me explain.
“Smart meters” are meters that go a bit further: they track domestic gas and electricity usage, like their old-fashioned predecessors, but they differ in that they then transmit this information directly to the supplier. They also transmit consumption data to an “IHD” – that’s an “in-home display” – where billpayers can see exactly how much they’ve used and spent.
In principle, fantastic. No more meter readings, either undertaken by some stranger who knocks on your door at an inconvenient moment or indeed by yourself (when you forget whether you’re supposed to include the digits after the dot or not).
No more estimated bills. Pay only for the energy you use. Cut down on your energy use, simply by knowing in greater detail how much you are paying for it.
Those are the claims made by Smart Energy GB – and they certainly lay them on thick. Their literature and adverts are crammed with statements such as “smart meters will bring an end to the era of estimated bills”.
I would still splutter in shock if I was told the cost of delivering the above benefits was £11bn. But the reality is probably worse: the cost will be that high, but the benefits won’t follow through.
For a start, millions of people will still have estimated bills, whatever Smart Energy GB claims.
Providers are a little hazy on the numbers, but it seems that a great many of those who have smart meters so far are still paying by direct debit, and are choosing – or have drifted by default in to a situation where the choice was made for them – to spread their payments over a year.
In these cases you still pay a fixed sum each month. The amount you pay is guessed at by your energy provider (albeit based on the frequent readings sent in by your smart meter) and the supplier’s formula. That is not especially “smart”. In fact it sounds very much like the old system where, inevitably, customers either underpaid or overpaid.
I realise that some suppliers include options where you can opt to pay each month for exactly what you use. And that may suit some people, but in reality most households want to pay a more-or-less similar amount each month, even though their actual costs in winter will be far higher than in summer. That’s how you budget.
I’ve had a smart meter in my home since early 2015. Every month I pay precisely the same sum of £102 to the supplier, Ovo, by direct debit. If I were to go home now and switch off every last thing, I’d still pay £102 per month, at least for a while.
I’m not convinced this is widely understood.
Nor am I convinced that smart meters will fix the energy industry’s scandalous inability to manage data. This, after all, has nothing to do with how the data itself is collected. Ovo sent me an annual snapshot in December, for instance, showing my gas consumption had fallen by about 80pc between 2015 and 2016. Wow. Sadly very wrong.
Ovo later said “the figure was incorrect due to an isolated issue with how information was pulled”. And despite having had a smart meter for nearly two years, my latest bill still had the ominous words: “These figures have been based on estimated meter readings.”
Ovo, still investigating, speculated that “the smart meter connection was lost temporarily”.
While surveys show homes with smart meters are cutting their consumption as a result of staring at their “IHDs”, I’m sceptical. If you’re paying the same amount each month, you’re hardly incentivised financially to switch off the lights. There are better reasons to do that.
‘What you pay each month will still be your supplier’s estimate’