Calling time on the smart meter rip off

Margaret Hodge MP, who chairs the influential parliamentary Committee of Public Accounts, believes the British public is being ripped off by the £12.1bn smart meter programme.
The Department for Energy and Climate Change (DECC) has instructed energy suppliers to install 53 million smart meters in 28 million homes and two million small businesses by 2020 at a cost of £215 per meter. The cost will, of course, be passed on to individual householders and businesses through their energy bills.
This was yet another of those ‘flagship’ green policies espoused by the government, but has turned out to be, in effect, simply a way of helping utility companies increase profits by helping them cut their operating costs.
Negligible
The impact on energy saving is now accepted to be almost negligible. Even DECC’s own figures suggest the use of smart meters will cut the average annual energy bill of £1,328 by just 2%. Not much of a return on investment – I suspect most householders would, given the choice, keep the £215.

Even this modest saving depends on consumers becoming more ‘energy savvy’ and changing their behaviour as a result of the additional information provided by the meter. That’s a huge assumption, as Ms Hodge’s committee were quick to point out, and they are clearly hard to ignore because the upshot is the second urgent parliamentary enquiry conducted by the Energy and Climate Change Committee into this issue in less than two years.
Interestingly, in the wording announcing this enquiry ‘energy efficiency’ does not figure. The Committee talks about ‘benefits to consumers, suppliers and the UK energy infrastructure’ by allowing energy suppliers to take remote gas and electricity readings and that overall ‘savings’ will be £18.8bn.
Competition
The figures are all over the place and nobody is quite sure where they are coming from. Hodge’s committee said DECC was depending ‘heavily’ on assumed competition in the energy industry to control costs and deliver benefits. ‘Relying on market forces to keep costs down may not be enough on its own to protect consumers,’ she said. ‘Energy suppliers are concerned that it may cost more to persuade reluctant customers to accept the new meters.’

Ms Hodge said DECC should require suppliers to provide ‘a clear breakdown for consumers of the cost of smart meters, their operational cost savings from stopping meter readings and whether consumers are achieving the expected reductions in energy consumption’.
There is also a very real danger that the Government is backing an obsolete technology that is actually not really ‘smart’ at all. It is already possible to control heating and cooling systems using apps on phones that are really ‘smart’ and via the Internet of Things. Consumers are also only looking for trends in energy consumption, these devices are accurate to @10% which makes them perfectly good enough for that function. The smart meter will only really reduce energy supplier costs through remote reading.
Why, therefore, is the government even consulting on the positively antiquated approach of a physical in-home display that is going to prove unpopular with consumers and logistically nightmarish to carry out? They should simply cancel the programme now and throw everything behind app-based energy information and control; invest in a huge public information programme that explains how consumers can access information and use it to save money – and save everyone £215.
With a General Election looming that would be the kind of nice little sleight of hand giveaway politicians love so much and might even convince us that the ‘greenest government ever’ has, finally, got to grips with at least one aspect of energy policy.