Smart Meter Rollout On A Knife Edge
The UK’s smart meter rollout is continuing with a vengeance. But while there is news to celebrate, there may be trouble ahead.
It’s fair to say that the UK’s smart meter rollout programme has been a bumpy ride. We’ve had technical problems that caused a whole generation of smart meters to be replaced. We’ve had budget issues and timeline extensions. We’ve even had a global pandemic that all but halted the rollout entirely.
However, even in the upheaval of the recent energy crisis, the rollout continues with no signs of stopping. Today, approximately half of households in the UK are reaping the rewards that smart meters deliver, including:
- Accurate billing – say goodbye to estimated bills
- Convenience – no more manual meter readings
- Real-time energy use information nudges you towards saving energy – great for your bank account and the planet
- Demand Side Response – the chance to get incentive payments for reducing consumption at peak periods
But it’s not all plain sailing from here. The numbers for the future tell a different story. In this article, we’ll look at the state of play right now for the smart meter rollout, good and bad. We’ll also examine why we are where we are. Let’s get started.
The good news
The good news is that recent data shows that 32.4 million smart meters are now installed in homes and small businesses in the UK. Of this number, 29.4 million meters are actually operating in smart mode, which is 51% of the total number of meters in the UK. Finally, the number of meters operating to their full capability (and the number of consumers enjoying the benefits) has passed the halfway mark.
In 2022, just over 3.5 million smart gas and electricity meters were installed. In the first quarter of 2023, 860,000 more homes and businesses received smart meters. The mean daily number of installs peaked at 15,750 in February. The areas of the UK with the most smart meter coverage are the Midlands, Yorkshire and North-West, where smart meters run in 60-70% of households.
The bad news
While the numbers outlined above are strong and a credit to the hard work of suppliers and installation engineers, it’s not all smooth sailing for the smart meter industry.
While we are getting 3.5 million smart meters installed in the UK’s homes and businesses each year, that number was up at around 5 million in 2018 and 2019. The rate of installs has actually slowed drastically and is not on course to accelerate again. Areas of the UK, notably in Scotland, have less than 20-30% smart meter penetration. Even parts of London aren’t over the halfway point.
The issue for the industry is that, on current form, there is no chance that the smart meter rollout will be completed before the target deadline of the end of 2025. Installation numbers would need to reach up to 5 million per year again, even to come close. That’s a massive increase on the current figure of 3.5 million.
While the consequences of missing the target are unclear, it does not look good for an already beleaguered energy industry.
Why the backlog?
It’s difficult to explain why the smart meter rollout is slowing its pace and (currently) missing its target. The problem is it takes both sides – energy suppliers and consumers – to have their house in order for the rollout to work. Consumers have to want a smart meter in their homes, and suppliers must be able to fulfil that requirement.
It’s clear from recent Ofgem reports that not all suppliers are installing smart meters at a fast enough rate. However, it seems there must be blockages on the consumer side too. Possible reasons could be:
- Lack of awareness of benefits – Consumers don’t know the advantages that smart meters can bring, including potentially lower bills due to reduced energy consumption
- Disregard of benefits – Consumers do not believe the benefits of smart meters outweigh the hassle of waiting at home for the installation
- Data concerns – Many consumers will understandably be worried about their suppliers accessing their personal data (although data security is hardwired into the smart meter infrastructure)
- Pandemic hangover – Some people are still wary of letting strangers into their homes to fit smart meters
Fixing the issue
So, what can be done? Again, it’s a tricky issue to fix. Firstly, suppliers must allocate sufficient resources to the smart meter rollout to be able to install meters quickly and efficiently for their customers. They should be contacting their customers and proactively booking installations on a large scale. It could be fair to say that everyone who actively wants a smart meter will have got one by now, so suppliers must do a better job of locating the holdouts and bringing them on board.
On the other side, the energy industry – suppliers, trade bodies, the government or anyone else – must do a better job of selling the benefits of smart meters to consumers. Smart meters are so valuable. They help consumers save money and time, with minimal effort on their side, and also help toward our Net Zero targets. What’s more, installation is free! There are few obstacles standing in the way of consumers reaping the rewards of smart meters. They just don’t know it yet.
Looking to the future
While the pure numbers show big strides taken in the smart meter rollout, it’s clear that these strides have to get larger if the industry is going to achieve what it set out to. We hope they can make it happen. We’ll wait and see.