Energy News

Smart meters won’t save consumers money

Thursday 30 June, 2011

By Martin Fagan - news@consumerchoices.co.uk

National Audit Office report cast doubts on the government’s ambitious plans for smart meters.

The National Audit Office’s (NAO) assessment of the government’s plan to install 53 million energy smart meters in 30 million homes by 2020 concluded consumers would not get value for money. The government’s proposals would mean each household will only save £23 a year, it said.

The NAO said this is an insufficient incentive for Brits to change their energy consuming habits and that the Department of Energy and Climate Change’s (DECC http://www.decc.gov.uk/) estimate that, between 2011 and 2030, smart metering would bring £18.6billion of economic benefits were wide of the mark.

Smart meters provide consumers with detailed and accurate information on their energy use and can enable energy suppliers to collect meter readings remotely.

But although the estimated cost of installing smart meters - currently £11.3billion - will be borne by energy suppliers, it is expected these costs will be passed on to consumers in the shape of higher bills eating into any financial benefits households see from using less energy.

“People are already struggling with the rising cost of energy, and smart meters could be one way to help consumers gain control of their energy use,” said Richard Lloyd, executive director of Which?

“However, the latest research from the National Audit Office warns the cost of the smart meter roll-out could add even more to people's bills. With estimated cost savings to consumers of only £23 per year, government must take a hands-on approach to keep costs under control and ensure consumers see the benefits of this billion-pound initiative.”

Zoe McLeod, energy expert at energy watchdog Consumer Focus, added: “Consumers will end up footing the bill for this multi-billion pound scheme.

“Success will be measured by whether it delivers real improvements such as helping people cut their energy use, switch more easily and get better customer service. The government can't assume that the competitive market alone will deliver for customers.”

In its report, the NAO also criticised the smart meter roll-out timetable as being insufficient to accommodate design approvals, procurement and testing and that the DECC has more work to do on the security of the system before roll-out starts.