Smart Meters: How Smart Are They?

The UK’s ground-breaking roll out of smart meters has already reached millions of homes and businesses and is costing the government around £11 billion (1). With costs like that, the British government obviously thinks there are some significant benefits to be had. But what are they? How smart are smart meters, really?

 

The UK’s rollout of smart meters

Smart Meter

If you haven’t had your smart meter installed yet, you can expect to be notified soon, as smart meters are due to be installed in every home in England, Wales and Scotland by the year 2020 (2). With more than 30 million homes and small businesses to get around (3), this is a fairly impressive operation when you think about it, and one which requires hefty input from the private sector as well as the government efforts and funding.

The rollout is largely being driven by the European Union. The EU asked all its member states to consider the use of smart meters in their countries as a means of controlling energy use and tackling climate change at consumer level (4). As a result, the UK government decided to adopt smart meters in all domestic premises as one of a number of measures being taken to improve our aging energy system.

 

So what is a smart meter exactly?

Smart meters will replace your traditional gas and electricity meters and will largely perform the same basic function: recording your consumption so that you can be charged correctly by your supplier. However, in addition to this basic role, they also perform a number of additional intelligent functions which are designed to help householders take control of their energy consumption and make savings where they can.

 

How does it work?

Smart meters are called ‘smart’ because they provide much more information about your energy usage than traditional energy meters. They come with an ‘in house’ display which allows you to see in real time how much energy you are using, which should help you to understand when energy intensive processes are taking place.


As well as this, smart energy meters are able to communicate directly with your energy supplier, using technology similar to that used in mobile phones. This means an end to estimated meter readings and direct debts which are too low or too high; leading, in theory, to correct billing each and every time. With suppliers armed with much more information about when and how you use your energy supply, it is hoped they will develop and offer more competitive tariffs based on your individual energy profile.

 

What are the benefits of having a smart meter?

It’s clear to see where the benefits of smart meters lie for your energy supplier. Once you have one of these meters, your energy supplier will no longer have to send out employees to read the meter; there will be less chance of errors and they will have a more informed, efficient way of administrating their business with you. But what benefits do smart meters offer to householders? Well, you’ll be glad to know there are actually quite a few!

 

More accurate bills

If you are a pay as you go customer right now, you’ll probably be familiar with the ‘average’ direct debit nightmare. For most of us, the energy company sets up a monthly payment amount based on our house size, family size and a good degree of guess work. After a few months, often longer, we realise we’ve been paying too much or too little, and are faced with either trying to extract our credit back from our suppliers, or raise the money to pay an unexpected debt.

With a smart meter in our homes, our supplier will know precisely how much we are using day by day, week by week, and rather than waiting for a meter reader to call round or for us to call in with an actual meter reading, they’ll be able to adjust our payment amount so that we’re always up to date with our bill payments.

 

No more meter readings

For most of us, a meter reading is no big deal. Many modern homes have their meters located outside, so we probably don’t even notice whether they’ve been checked or not. For some, however, the knock of the meter reader can be a highly distressing experience. 
 
Older people and those who are vulnerable can be prime targets for doorstep fraudsters. Knowing that there will be no legitimate caller posing as ‘the gas board’ or any sort of meter reader will be welcome news to them, as it will be one less reason to open the door, and one less chance to be exploited.

 

Exciting (and hopefully cheaper) new tariffs

As more and more households move to smart meters, suppliers will have a whole wealth of data at their fingertips about how and when we use our energy supply. This will give them a much better picture of high demand periods, and allow them to more effectively manage their energy supplies on our behalf. 
 
It is hoped that this newfound information will lead to customers being offered customised or more adaptable tariffs that better fit with their energy usage and allow them to make big savings over standard energy rates. 

 

Faster, easier switching of suppliers

The UK is a big fan of supplier switching, with plenty of publicity given to the benefits of doing so continuing to encourage consumers to review their tariff on a regular basis. However, there is usually a lead time of up to a month or more before we can start enjoying the benefits of a better energy deal.
 
With new smart meters installed in our homes, suppliers promise to make it faster and easier to switch suppliers than ever before. Because our supplier knows our usage day by day, hour by hour, it will be a simple act of clicking a button to transfer our supply over to our new chosen provider. 
 

Greater understanding of energy consumption

One of the biggest benefits that customers who have already taken the new meters have commented on is the in home display that helps them understand where energy is being used. Switch on the kettle, and see how it changes. Do a wash, and understand what it’s cost you. 
 
Certainly one of the biggest changes for many early adopters has been the understanding of the costs associated with leaving things on standby. Households can at last see how much their games console, TV box and other appliances are costing them, which is encouraging more people to switch off before going to bed or going out for the day.
 

Do I have to have a smart meter?

The short answer is no. Some householders are concerned about privacy issues, with smart meters broadcasting lots of information about them via mobile data signals. Others have voiced concerns about radio frequency waves which could be emitted by the device. Energy companies have been told to install smart meters in as many homes as possible, but it is still your home and you still have a right to refuse. 
 
If you really don’t want a smart meter, you should still get your meter upgraded during the rollout as your old meter will now be obsolete and could pose a safety hazard. If you decide to refuse the smart meter, your supplier may either install a new ‘dumb’ meter, just like your old one, or will install a smart meter but with all the ‘smart’ features switched off.
 
Smart meters have been thoroughly tested for safety, and communicate using a highly sophisticated, secure communications system. If you are worried about smart meters, make sure you do your research before refusing them, as you could be missing out on a whole host of benefits if you decide to say no.
 
 

More accurate bills

If you are a pay as you go customer right now, you’ll probably be familiar with the ‘average’ direct debit nightmare. For most of us, the energy company sets up a monthly payment amount based on our house size, family size and a good degree of guess work. After a few months, often longer, we realise we’ve been paying too much or too little, and are faced with either trying to extract our credit back from our suppliers, or raise the money to pay an unexpected debt.

With a smart meter in our homes, our supplier will know precisely how much we are using day by day, week by week, and rather than waiting for a meter reader to call round or for us to call in with an actual meter reading, they’ll be able to adjust our payment amount so that we’re always up to date with our bill payments.

 

References


1. [Online] http://www.telegraph.co.uk/finance/personalfinance/energy-bills/11975065/Smart-meters-will-cost-11bn-but-youll-be-lucky-if-yours-saves-you-30.html.
2. [Online] http://www.uswitch.com/gas-electricity/guides/smart-meters-explained/.
3. [Online] http://www.moneysupermarket.com/gas-and-electricity/smart-meters/.
4. [Online] https://ec.europa.eu/energy/en/topics/markets-and-consumers/smart-grids-and-meters.

 

 

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