Smart Meter Rollout Could Cost £1b More Than Estimated

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ELN reports that the government’s smart meter rollout could cost £1 billion more than previously predicted, taking the total cost to £12 billion.

A research from the Big Deal and ITV states the Department for Business, Energy & Industrial Strategy (BEIS) has “overestimated” the cost of buying equipment by £394 million but “dramatically underestimated” the cost of installation by nearly £1.5 billion.

It believes the two main reasons for the overspend are:

  • Underestimating the number of homes that have either just one meter or gas and electricity meter from different suppliers. The research estimates each of these installations will cost £67 rather than the £107 it costs when one supplier replaces both meters.
  • Underestimating the number of households that will require second visits. The research claims BEIS has said 5% of installations will require a second visit but it found 15% as a “more accurate figure and could be much higher”.

It also found consumers are currently facing issues such as the smart meters not communicating with the energy supplier correctly and in-home displays not working properly, therefore not receiving information from the meters.

BEIS told ELN it doesn’t recognise the £1 billion figure as the research does not take into account the benefits of having smart meters. It adds the rollout is expected to provide a net bill saving of £300 million in 2020 across all households, rising to £1.2 billion a year in 2030.

This statement is reinforced by another new survey from Smart Energy GB that found

Around 82% of the 10,000 people questioned said they have taken at least one step to reduce their energy use.

The survey also found in-home displays (IHDs) – which shows how much energy is being used in pounds and pence and in near real time – are helping people get their gas and electricity use under control.

Based on the above figures the total savings would be just £7.5b over 10 years. It remains questionable whether investing £12b (£150 per household) is the most efficient way of achieving a reduction in energy consumption. Whatever the meter display shows, people still have to cook and wash and there is a limit how much households can economize just from checking the smart meter.