Smart meters will save customers just £11 a year on their energy bills due to delays and rising costs, a new damning report has claimed.
The British Infrastructure Group - a group of MPs and lords who work to promote better infrastructure across the UK - says delays and rising costs mean the net benefit of the national smart meter roll out has fallen, and the expected saving on an annual dual fuel bill in 2020 will be just £11, rather than the £26 that was previously reported.
Its report, Not So Smart, which has been co-signed by 93 MPs and peers from different political parties, also predicts that the 2020 target to have 53 million gas or electricity smart meters installed in 30 million homes, will be missed.
The group is now calling on the Government to urgently review the roll out process and says the energy regulator Ofgem must ensure that further programme costs aren't passed on to consumers.
Want your key questions answered? See our Smart Meters guide.
Martin: 'The rollout of smart meters has been a cock up'
The report has found technological, commercial, economic and regulatory problems with the smart meter roll out.
It includes a quote from Martin Lewis, founder of MoneySavingExpert.com, who said: "The roll out of smart meters has been a cock up and a catastrophe. Energy firms are now using it as a soft form of trapping people into poor deals as they can't switch providers without their meters going dumb."
Some of the key issues the report has raised are:
- More than half of smart meters 'go dumb' after switching. The report found that of the one million customers with a smart meter who annually switch provider, over half are left with a meter which has lost its smart features. The report says this both disincentivises switching, and makes it more difficult.
- New smart meters have been delayed again. Second generation switchable meters were planned to be rolled out in early-mid 2016, in time for the November 2016 deadline. However, by January 2018 only 450 were installed, with just 80 sending live meter readings, and testing was ongoing. The Government is now considering extending the deadline to December this year.
- Working meters are needlessly being replaced. The reports says that exploitative commercial agreements mean new suppliers will often replace an existing smart meter, even when they can receive data from it. This further increases roll out costs, and could well continue throughout the roll out of the second generation meters.
- Predicted savings are inflated. The Government maintains that consumers will save £300 million in 2020, rising annually to 2030. The report's analysis of the latest cost-benefit calculations has found them to be not only outdated, but based on a number of questionable assumptions of personal, industry and environmental savings.
- Suppliers are using scare tactics to meet targets. As the pressure on suppliers to meet the 2020 target increases, the report says suppliers have been known to use 'scare tactics' to convince customers to accept a meter. These include stating bills would otherwise go up, smart meters are compulsory, current meters are unsafe, and booking installations without a customer’s consent.
The report makes 10 recommendations, including compensation for each day a customer's meter malfunctions and provides an incorrect reading. Another suggestion is that suppliers begin the mass production and installation of second generation switchable meters immediately.
What does the British Infrastructure Group say?
MP Grant Shapps, the chair of the British Infrastructure Group, said: "This BIG report investigates the ongoing £11 billion roll out of 53 million energy smart meters across Great Britain. It has found that the roll out has been plagued by repeated delays and cost increases, with suppliers now almost certain to miss the 2020 deadline, and programme benefits likely to be slashed even further.
"Moreover, although the entire programme has been funded by customers through higher energy bills, unlike suppliers, they are not presently guaranteed to see the majority of savings that do materialise.
"With its recommendations implemented and continued close oversight, BIG believes that the roll out can successfully help to usher in a new wave of smart technology, and fundamentally transform energy use in the country."
What does Smart Energy GB say?
Robert Cheesewright, director of policy and communications at Smart Energy GB - the national campaign for the smart meter roll out, said: "The smart meter roll out is a vital investment for Great Britain, leading to savings that will outweigh the costs by billions of pounds. The Government and Ofgem have been clear that they expect energy suppliers to pass these savings on to customers."