The Government must urgently cut smart meter roll-out costs

by , Campaigns Officer Energy & Home 7 October 2014
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Have you had a smart meter installed in your house? The official roll-out’s due to start next year, but we’re concerned about the £10.9bn cost. That’s why we’re calling on the Government to urgently cut costs.

Energy meter

A number of energy suppliers, including British Gas and Eon, have already started installing millions of smart meters up and down the country. However, the full roll-out won’t begin until the end of 2015. If everything goes to plan, we’ll all have gas and electricity smart meters in our homes by 2020. But, with you and me footing the bill, what’s being done to ensure we’re getting value for money?

We’ve previously called on the Government to pause the smart meter roll-out so that costs could be properly assessed. The roll-out was delayed for year. But now that the programme’s set to begin in earnest in December 2015, we’re calling on the Government to do all it can to cut the costs that will ultimately end up on your energy bill.

Three ways to cut smart meter costs

Today we wrote to the Energy Secretary, Ed Davey, ahead of his speech at the Liberal Democrat Party Conference, to make him seriously consider cost cutting measures.

The Government says that competition between suppliers will keep costs down, but with the energy market undergoing a full scale investigation by the Competition and Markets Authority, we’re not convinced.

So, as part of our Fix the Big Six campaign, we have identified three ways in which savings can be made:

1. The Government should explore using economies of scale to drive down costs. The meters themselves are one of the biggest costs for the roll-out, yet suppliers are currently buying meters separately. A centralised approach could save hundreds of millions of pounds.

2. A coordinated approach to the installation of meters in multi-occupancy buildings, such as flats, is required to reduce disruption and cost. Otherwise, there could be an unnecessary duplication of effort and costs, with visits from multiple suppliers.

3. Suppliers are required to take ‘all reasonable steps’ to install meters in every home by 2020, but it hasn’t been made clear what this means. Suppliers need early guidance from Ofgem on what lengths they have to go to so that they can improve the efficiency of the roll-out and avoid disproportionate costs.

Get smart on smart meters

Smart meters can be a very good thing, giving you more accurate billing and control over the energy you use. But that doesn’t mean we should be writing a blank cheque to have them installed in our homes. The Government, energy suppliers and Ofgem must get to grips with the smart meter programme to ensure we’re not paying over the odds. Otherwise it’s in danger of spiralling out of control.

Have you had a smart meter installed? Has it led to more accurate bills, or made you think twice about how much energy you use?


Add your comments


John Ward

It seems that one of the reasons why the smart meter roll-out is stalling is that an entirely separate, and fairly complex, communication system is having to be installed across the country to enable every meter to transmit its data every day without reliance on other communications or data transmission systems. It is also necessary for the communications system to be compatible with whatever type of meter was installed at each property irrespective of supplier so that if people switch supplier their meter does not immediately go into dumb mode. Allegedly the government has been tweaking the specification for the interface and data transmission standards causing a hold-up in the roll-out. The chances that they will abort it despite all the objections are probably infinitessimally low because it is just not that kind of political issue; we seem to shrug our shoulders over £10+ billion being spent even though it is virtually impossible to find out what the pay-back on this expenditure is likely to be and when there are plenty of other good uses for that sort of money in all the fields of health, education, welfare, energy, and transport. £2 bn each would be a rough & ready way to allocate it and spread satisfaction far further.



If the electricity supply industry was state owned, contributors to this forum would be howling for the blood of the incompetent bureaucrats who were failing to provide the energy. Smart meters enable the private owners of the industry to take their profits without investing in the power stations to meet the demand. Adjusting demand to suit supply. Marketing utopia.


John Ward

There are very few advocates of state ownership; many of us remember the waste and inefficiency of the regional electricity and gas boards. However, private companies operating in a regulated environment should be a successful service meeting customer expectations. There are a lot of sensible state controls over the energy suppliers but the state has also heaped a number of obligations on the companies that distort the market and have inequitable consequences. Getting the balance right between free enterprise, consumer satisfaction and assurance of supply is the challenge. As mentioned previously, the product is standard and universal; delivery shouldn’t be such a problem.



It’s a shame there’s no happy medium between the greed of corporations and the incompetence of government.


malcolm r

Although I do not support the cost benefit of smart meters there is a benefit in them in conjunction with standing charges. They will, it is declared, reduce energy companies admin costs. So as soon as you have a smart meter installed your standing charge should be immediately reduced. You will then see a direct benefit.

However, if you have a unit-only tariff, this could all get lost amongst changing energy costs, distribution costs etc – so blurred you would never know if you were being short changed.

Is it worth £10.7 bn? I doubt it.

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