Smart meters are a clever way to cut billsUnited Kingdom
Gas hob, Anthony Devlin, Laura Shannon
New devices should bring energy savings, but details about when they will be installed remain sparse
How much do you know about smart meters? Very little, probably, but one of these devices could be in your home within the next 15 months — offering the chance to cut your energy bills by up to 15 per cent.
Consumers have been starved of details about the new meters, even though every home will have one installed over the next decade. Experts have criticised Ofgem and the Government for their “deafening silence” on the issue. Six people in ten don’t know what a smart meter is, while a further third have heard of them but don’t know what they do, according to figures from the price comparison website uSwitch.com.
Peter Franklin, founder of the energy industry consultancy Enstra, says: “I don’t understand why so little has been said about smart meters, as they are good news for consumers. This is not only happening in the UK; it’s happening all over the world and significant savings can be made.”
Smart meters monitor energy consumption in the home over a day, week or month and show the cost. They come with a small device featuring a real-time display, which shows usage and cost and can be kept anywhere in the house, while the meter itself sends information and readings directly to your energy supplier. Readings are sent automatically over wireless networks and consumers will receive an accurate bill, not one based on estimated usage.
Last year the Government announced plans to install smart meters in 27 million UK homes by 2020, starting in 2012. British Gas then pledged to install two million meters by the end of 2012.
Some experts doubt whether people will actually make impressive savings from the new meters, with one study predicting a net saving of only £14 a year on bills. “There is a lot of debate about what savings will be made,” Mr Franklin says. “Estimates range from 15 per cent down to 2 per cent. Initially we may see a very quick change in behaviour worth savings of between 10 per cent and 15 per cent on bills, but this could diminish as people slip back into old habits.
“The second effect to kick in will be when people have to change their machines and appliances, as they’re more likely to seek out the energy-efficient varieties. This could give a significant saving.”
Consumers have also expressed concern about what information will be made available to energy suppliers when the meters are used. Privacy campaigners complained that data may be used to target customers who do not cut the amount of energy that they consume. But Ann Robinson, director of consumer policy at uSwitch.com, gives this reassurance: “It’s important that consumers can have the confidence that their data is not going to be misused. Ofgem will have a central data company, which will handle all information from companies and it will be tightly protected.”
Ofgem says that it is working with consumer groups and privacy experts to develop a set of rules and safeguards. A spokesman for the regulator says: “One of the top issues for the Department of Energy and Climate Change (DECC) and Ofgem’s smart metering project is ensuring data security and privacy. During the coming months, we will be doing further work to make sure that we fully understand such issues and how they might best be addressed.”
Once the regulation is better defined, sophisticated developments in technology could make smart meters even more advanced and better equipped to save you money. For example, they will be able to detect when a room is occupied or vacant and turn down the heating in a room with no people. Tariffs could also be reduced on the proviso that consumers allow their appliances to be controlled remotely.
“The technology will evolve,” Mr Franklin says. “Most consumers probably would not mind if their water was heated by electricity instead of gas. So if it’s windy in the morning before you wake up, that wind power can be used to heat your water, when it would otherwise be wasted. The same goes for a freezer. If it’s closed, it doesn’t matter if it’s switched off for half an hour.”
Because official guidelines are still being developed, consumers are advised to check carefully what energy tariff they choose if adopting a smart meter early. Energy companies have offered trials, but these may only be available on certain tariffs. Ms Robinson says: “Make sure that you understand all the terms and conditions of the deal, especially if it involves a longer contract.”
Consumers are also warned to avoid being misled over devices that are sold under the guise of smart meters but do not offer the same functions. Monitors that show how much energy you use are sold for up to £50, but they don’t send any information to your energy supplier.
“They are gadgets,” Ms Robinson says. “Smart meters shouldn’t cost you any money and are important because we will bring the end of estimated bills. There will be scope for a drastic reduction in price as a result of their introduction.”
Energy companies will be responsible for contacting consumers in the lead-up to the 2020 deadline to recommend that a smart meter be fitted. Ofgem says that it is looking at the best ways to inform the public about smart meters, but that the changes should be led by energy suppliers. An Ofgem spokesman says: “One of the main reasons for making energy suppliers responsible for rolling out smart meters was that they are best placed to explain this change to their customers when it starts in 2012.”
Ofgem and the DECC have published proposals for the delivery of smart meters. It invites consultation from experts and consumers on issues such as privacy and the handling of data.
The deadline for responses to the consultation is October 28 and details can be found at www.ofgem.gov.uk.
‘We definitely made a saving’
Steve Fitton, of Addlestone, Surrey, has had a smart meter fitted at his four-bedroom home, which he shares with his wife and two teenage daughters. He was asked by his energy supplier, EDF Energy, to be a part of its trial.
Mr Fitton says: “The monitor gives a real-time view of how much you’re spending on gas and electricity and helps with budgeting. I also get very accurate bills that match the reading on the meter.”
The 46-year-old project manager says that the novelty factor has died down, but the family continue to ensure that lights and appliances are switched off when they are not being used. He says: “We became more conscious about how we use energy. I don’t know the exact figure, but we definitely made a saving.”
The family found the display monitor, which shows what you are using and the cost, easy to use.
Mr Fitton adds: “You can delve into sub-menus to find lots more information but the basic functions are very accessible.”
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