Sunday 10 April 2016

Smart meters: worth the money?

Are smart meters really worth the investment?

The Energy Advice Line has questioned whether a new metering system about to be installed in millions of home and businesses will be cost-effective.

Julian Morgan, managing director of the price comparison, switching and advice service for energy users, said the technology had been rejected by Germany and found not to be financially worthwhile in other parts of the world.

"We are also very concerned that the technology might discourage consumers from switching suppliers, as the meters installed by one supplier might not be able to 'speak' to another," Mr Morgan said.

"At the very least, suppliers and regulators need to ensure that the next generation of smart meters is designed to encourage, not discourage, consumers to switch to save money on their bills."

Smart meters send information on energy usage directly to the energy supplier, eliminating the need for meter readings. The technology also allows consumers to see how much energy they are using in real time, enabling them to adjust their usage accordingly.

Although the EU has ordered all members to introduce the technology by 2020, as long as there is a positive financial case to do so, not all countries see any financial benefit.

Germany has rejected the system, arguing the cost to consumers of installing the equipment would outweigh any potential saving on their bills. Auditors in Australia and Canada have also found the systems too expensive.

However, some consumers who already have smart meters say that seeing the real cost of using appliances has encouraged them to adjust the way they use energy - by using the microwave more than the oven for example - which has saved them money on bills. The government says this kind of behaviour could reduce households energy bills by an average £26 a year up to 2020.

"While some consumers who already have the first wave of the technology installed have seen some benefits, there have also been problems," Mr Morgan said. "We are calling on Ofgem and the big six suppliers to ensure that the second wave of these meters deliver the promised benefits.

"The total cost of introducing this technology into 53 million homes and small businesses is estimated at £11 billion - and suppliers have admitted that at least part of this cost will be passed on to consumers.

"It is absolutely essential that the new generation of meters, which is already running late, is fit for purpose. This new system must not increase the financial burden on consumers or place obstacles in the way of them switching suppliers."

The Energy Advice Line is one of the UK's leading price comparison and switching services for business and domestic energy customers. It is also an advocate for energy market reform and has campaigned for a better deal for energy users, including calling for a ban on cold calling and changes to regulations to make it easier for all consumers to switch suppliers.

The service is completely independent and free. Consumers can quickly and simply search the market for the best available energy deals from an extensive panel of small and large energy suppliers. The service also offers a free advice line for business energy customers.

For further information visit energyadviceline.org.uk