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September 10, 2014

Will smart meters be out of date when they hit households?

Public Accounts Committee questions cost savings of smart meter programme.

By Joe Curtis

Smart meters could already be outdated technology by the time they are installed in 53 million UK homes, according to the Public Accounts Committee (PAC).

The smart meters comprise a gas meter and an electricity meter linked to a monitor that shows people their energy expenses in pounds and pence, and the system is set to replace current meters in six years’ time as part of a £10.6bn nationwide rollout.

But PAC warned yesterday that the new meters may be outdated as soon as they enter homes by the end of 2020.

PAC chair Margaret Hodge MP said: "Some aspects of the programme could be out-of-date by the time it is rolled out. Evolving technology suggests that customers could receive the information on their smartphones, making the in-home display redundant.

"Energy suppliers will be required to offer in-home displays, even though customers may not want or use them. Consumers will have to pay for them even though they might already be out of date."

Alastair Masson, client partner at IT services provider NTT Data, said a set of international standards on smart meters would ensure the technology was not simply a money-making move from energy suppliers.

"In the race to ensure that the technology is not considered ‘out of date’, the danger is that we could start to see energy suppliers trying to push newer, more innovative services that guarantee a better transparency of services purely as a means of differentiating their services, with little or no benefit to consumers," he warned.

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The committee also raised doubts over the Government’s estimated £26 cost saving per household – worth just 2% of an average £1,328 annual energy bill before jumping to £43 per year from 2030.

The Government estimates the Smart Metering Implementation Programme will cost homes and small businesses £215 each over the next five years, which the annual £26 cost saving would also have to be weighed against, suggested PAC.

The committee called on the Department of Energy and Climate Change (DECC) to make a number of commitments on smart meters before the rollout starts in late 2015.

One measure was to make sure the meters are inter-operable between energy providers, so households are not tied to one supplier.

Additionally, DECC should force energy suppliers to outline the costs of smart meters to consumers, as well as savings, while they should measure real reductions in energy usage compared to expected reductions.

Hodge added: "The Department must monitor progress, costs and benefits during roll-out to identify whether changes are needed to secure the delivery of smart meters at minimum cost to consumers."

Photo: British Gas smart meter monitor

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