The state of the UK smart meter rollout in 2021
Following another delay to the UK smart meter rollout deadline, it’s time to assess where we are and how things can be improved.
The smart meter rollout is something we have talked about a lot, but that’s because there is always something new happening. Unfortunately, it is rarely good news. Since the plan to install a smart energy meter in every UK home and business was announced in 2009, there have been budget extensions, technical problems and delay after delay. Of course, there has also been a global pandemic to deal with. As the government has recently announced another extension to the deadline, it’s time to take stock and look at the situation as things stand. We should also look to the future to see if there is an alternative to the rollout which may be more effective.
A new deadline
In June 2020, ministers announced that the deadline for completing the smart meter rollout would be pushed back to June 2025. Previously the deadline was the end of 2024.
The primary reason for this new extension was the Coronavirus pandemic. During the first UK COVID-19 lockdown, smart meter installations all but stopped. Engineers were not allowed to install new meters unless it was an emergency and the customer’s power supply was at risk.
Once lockdown restrictions began to be eased, installations could start again, providing engineers followed Coronavirus guidelines. However, there was a vast backlog to catch up on. At the same time, many older and vulnerable homeowners turned down the opportunity to have a meter installed because they do not want strangers coming into their home.
When the new extension was announced, 31% of homes in the UK had a functioning smart meter.
As we begin 2021 and look back at the previous year, we can see how dire the situation has become.
In 2020, less than two million smart meters were installed in UK homes and businesses. This is the lowest number of installations since 2016. It represented a drop of 27% from the previous year. 2019 also saw a drop from the peak installation year of 2018.
We can also see the impact of the COVID-19 pandemic. Installations in April 2020 were 95% down on April 2019. Only 12,000 emergency installations took place during this month. When restrictions lifted and home visits could take place again, numbers were still lower than where they need to be. Installations in November 2020 were 7% lower than in the previous months – and it’s expected that numbers dipped even lower in December 2020 due to Christmas.
The target by June 2025 is for energy companies to have installed smart meters in 85% of their customers’ homes. Aside from extending the deadline, what else can the government do to kickstart the smart meter rollout back to life?
In November 2020 came a new framework, detailing the milestones each energy company must reach if they are going to reach the final target in time. From July of 2021, there will now be binding targets in place. Energy companies must now accelerate their installation programmes. Failure to meet these milestones could see punitive fines. Each energy company has its own milestones based on the number of customers they serve.
There is also an aim for another mid-term ‘state of the nation’ check in June 2023 to review how energy suppliers are performing and what they need to do to meet their targets. This could involve the setting of new milestones.
The new framework has built-in tolerance levels that take account of unforeseen events such as another lockdown (or pandemic). We don’t know what lies ahead. Anything could potentially derail the rollout or impact its progress.
The challenge with the smart meter rollout is that it is not compulsory. Customers can refuse to get one installed. With COVID-19, this is happening regularly as they do not want to risk having an engineer in their homes, despite the Coronavirus protection guidelines.
Customers do not have to pay upfront for a smart meter, but the rollout cost is reflected in higher energy bills. Currently, the price for the entire rollout is predicted to be £13.5 billion. That is an astronomical amount, even when spread across the population. Is it any surprise the public is not entirely on board?
An alternative solution
Perhaps instead of extending deadlines and creating new targets, the government should be asking the question of whether we need a rollout in the first place. The environmental benefits of having a smart meter are minimal. Is it really worth this long, troublesome and expensive rollout process?
Also, energy companies have more important things to deal with right now, with volatile energy markets, the global pandemic, extreme weather and new regulations. Surely it would be better for the companies and their customers if they could devote their time and resources to these challenges, instead of the smart meter rollout?
The alternative solution we always talk about is replacing energy meters with smart meters only when they actually stop working. When a traditional energy meter comes to the end of its life, that’s when it’s time to get a smart meter. This would be better for energy companies, who could concentrate on things that really matter to the environment and their customers. On the other hand, consumers who were never concerned about smart meters wouldn’t even notice.
Unfortunately, it looks like we are too far down the road to turn around now. There are too many sunk costs, and too many plans have been made. Perhaps the next time the energy suppliers miss all their targets, the powers that be will understand that it’s time to end the rollout.