Roll- out of smart meters could cost households £ 400
SMART meters are being installed into millions of homes – and they’re supposed to save us money.
But they could, in fact, be costing each household almost £ 400.
A new report by the National Audit Office ( NAO), the official spending watchdog, has warned it is “currently uncertain” whether customers will get any benefit from smart meters or not.
And the findings confirm concerns raised by Birmingham MP Steve McCabe ( Lab Hall Green), a long- standing critic of the smart meter scheme.
He said: “What we do know is that the ever increasing costs are being directly passed to households.”
Until recently, most of us rarely looked at our gas or electricity meters. They may have been hidden away in a cupboard under the stairs, and once in a while someone would come round to take a reading.
Smart meters are a very different. They tend to be small, with attractive digital displays that let you see how exactly much gas and electricity you’re using, and how much it’s costing you.
And they send the results directly to your energy supplier, to ensure you’re always charged the right amount.
The Government has told energy companies to take “all reasonable steps” to install smart meters in every home and small businesses by 2020.
That’s going to cost money, and customers will have to pay.
You don’t pay extra if you have a smart meter in your home. Rather, everyone shares in the cost, whatever sort of meter they have, because energy companies add it to our bills.
In theory, this shouldn’t be a problem – because smart meters are also supposed to save us money in the long run.
The idea is that they make the energy industry more efficient. One example is that the energy companies are supposed to require fewer call centre staff to deal with queries from customers.
And they are supposed to encourage people to use less energy, which clearly leads to lower bills.
It all means that the cost of installing smart meters is eventually offset by the savings they create.
But that’s only the theory. According to the NAO, it’s not working in practice.
The cost of i n s t a l l i n g smart meters is expected to be £ 11 billion, according to the Department for Business, Energy & Industrial Strategy.
That comes to £ 374 for every household that has both a gas and electricity supply.
The NAO explains: “These costs will be met by energy companies rather than the government, then recovered from consumers through higher energy prices.
“The costs are equivalent to £ 374 per dual fuel household,”
And the NAO says that costs “have increased by at least £ 0.5 billion since the Department’s last forecast and could increase further”.
A £ 0.5 billion increase in costs is equivalent to £ 17 per dual fuel household, bringing the total to £ 391.
But even this is “a conservative estimate”, according to the NAO.
Mr McCabe said: “The whole point of the smart meters programme is to save people money on their energy bills but Ministers are unable to contain the cost of the programme and have literally no way of knowing if any savings are passed on to customers.” Energy and Clean Growth Minister Claire Perry said: “We’ve said everyone will be offered a smart meter by the end of 2020 to reap these benefits and we will meet that commitment.
“This world- leading upgrade to our national infrastructure is the cornerstone of our move to a smarter energy system of the future and will bring benefits to consumers and industry worth up to £ 40 billion.”
MP Steve McCabe