Energy News

Smart meters could be a dumb idea, say MPs

Wednesday 18 January, 2012

By Martin Fagan

Parliamentary Committee says the benefits of smart meters won’t be passed on to consumers and poorer families will be worse off.

Brit’s lack of understanding on the way smart meters work will mean the only beneficiaries of their installation will be the big energy companies, says a Parliamentary Committee.

The Public Accounts Committee (PAC) has issued a report into the preparations for the mass roll-out of smart meters in the UK and has expressed concerns about “significant uncertainties” about the project.

Among the PAC’s concerns is that Brits will fail to understand how the smart meter can save them money, as this requires a change in behaviour to reduce consumption and therefore energy bills.

At present the roll-out of 53 million smart meters by 2019 is expected to cost upwards of £11billion. Energy suppliers are currently responsible for installing the meters and the cost of installation will be passed on to consumers in the shape of higher energy bills.

Smart meters collect and feed real-time data on each household’s energy consumption to suppliers, while attached monitors tell people about their usage patterns and costs. The theory is that smart meters help utility providers manage their product while making it easier for households to control how much they use and spend.

The PAC has shown particular concern for vulnerable and low-income families who could find themselves worse off, as paying for the meter could eclipse any savings they made from reducing their energy consumption. Also it said there was no evidence of a “transparent mechanism” for ensuring any savings made by the suppler from smart meter installation will be passed on to consumers.

“The track record of energy companies to date does not inspire confidence that this will happen,” said committee chair Margaret Hodge in a statement.

“Consumers will only benefit from smart meters if they understand the opportunity to reduce their energy bills and change their behaviour. So far, the evidence on whether they will do so has been inconclusive. Otherwise, the only people who will benefit are the energy suppliers.

On Monday (15 January), consumer watchdog Which? called for a halt to the smart meter roll-out, saying the government needed to rethink its strategy before proceeding. Which? believes that, currently, the government does not have proper control on the costs, so consumers could end up writing a “blank cheque” for the programme through higher bills.

Richard Lloyd, executive director of Which?, said: “This report confirms our view that the smart meter roll-out should be stopped and reviewed before the costs escalate.

“The government must listen to warnings from MPs, energy suppliers and consumer groups alike, otherwise it risks an embarrassing and costly failure that will be rejected by consumers.”

Photo by EdinburghGreens