Energy suppliers have been given an additional four years to meet their smart meter installation targets after the Government pushed back the deadline date.
The Government has introduced ‘strict’ new yearly installation requirements for suppliers until 2024 and said suppliers could still receive fines if targets are missed.
A consultation, released by the Department for Business, Energy and Industrial Strategy (BEIS) yesterday, said that installing smart meters will save customers £5.6billion in energy bills, the equivalent of around £250 for every family.
They also ensure accurate and up-to-date billing – giving households the ability to quickly check up on what they owe and avoid meter readings – but their rollout has been criticised and there are concerns over old meters that cannot switch supplier
Energy providers have been given an extra four years to offer their customers smart meters
Despite delaying the deadline, BEIS still said the Government remains on track to meet its commitment for everyone to be offered a smart meter by the end of next year.
Minister for Climate Change, Lord Duncan of Springbank, said: ‘Our energy system is already cheaper, greener and more efficient for consumers because of smart meters.
‘We remain on track for suppliers to offer every home a smart meter by the end of next year, but to maintain momentum beyond 2020 we are proposing strict yearly installation targets for suppliers from 2021.’
We explain why deadline has been pushed back and what it means for households.
What has changed for smart meters?
The new obligations to achieve these benefits are outlined in proposed new licence conditions, set out by the Government, which would come into effect on 1 January 2021 when the current regulatory framework comes to an end.
Robert Cheesewright, director of corporate affairs at Smart Energy GB, said: ‘The smart meter rollout is an important upgrade of our energy sector, and supports the building of a cleaner, greener energy system that helps Britain meet its net zero target.
‘It is crucial we complete this vital rollout. We welcome Government providing a clear timetable for this. The financial and environmental benefits for households and the country far outweigh the costs by billions of pounds.’
Why has the deadline been pushed back?
The smart meter rollout has not been as successful as the Government had hoped with recent figures revealing that the number of domestic smart meter installations was down between April and June of this year, when compared to previous months.
Just over one million smart meters were installed, down 2.2 per cent on the first three months of the year, figures released by BEIS showed.
This led to many experts calling for the deadline date to be extended, something that This is Money has also long backed.
‘Extending the smart meter rollout deadline is a common-sense move
Gillian Guy, Citizens Advice
Gillian Guy, chief executive of Citizens Advice, said: ‘Extending the smart meter rollout deadline is a common-sense move that is good news for consumers. It’s been clear for a long time that the 2020 deadline wouldn’t be met and today’s announcement finally recognises that reality.
‘This new deadline gives suppliers time to fix ongoing technical problems and make sure customer service isn’t sidelined as the rollout continues. It’s also apparent that the cost of the rollout is escalating, and the public are picking up the tab through their energy bills.’
Customers have complained that their SMETS1 meters didn’t work after switching providers
Why do old smart meters go dumb?
Smart meters have remained controversial since being introduced as many of the SMETS1 meters – also known as the first generation meters – were found to go ‘dumb’ after customers switched energy suppliers.
Once they lost functionality, they became all but useless with customers having to ask for the existing meter to be removed and a new one to be installed by their new provider.
This issue was set to be resolved through the introduction of SMETS2 meters, the second generation devices, which are supposed to retain functionality when customers switch providers.
Following 15 March of this year, energy suppliers should only have been fitting SMETS2 meters for customers as any SMETS1 meter installed after that date would not count towards suppliers rollout obligations, which are regulated by Ofgem.
However, many households have reported still have SMETS1 meters fitted with customers being told by their supplier that either they were trying to get rid of their existing stock or that SMETS2 meters wouldn’t work in their area.
Will this get the public onside?
Another issue with the smart meter rollout has been the pressure put on customers to have one installed with many of the cheapest tariffs now only available to those who agree to have a device fitted.
Head of regulation at uSwitch, Richard Neudegg, said: ‘The Government has finally bowed to the inevitable and accepted that the 2020 smart meter deadline is impossible to meet.
The new 2024 plan suggests ministers are confident that suppliers are close to cracking the technical problems
Richard Neudegg, uSwitch
‘The new 2024 plan – which places more onus on energy companies to meet interim installation milestones along the way – suggests ministers are confident that suppliers are close to cracking the technical problems which have plagued the roll out so far.
‘Public confidence in the programme has been badly damaged, but this is now an opportunity to rebuild trust. In particular, people want proof that the solution which allows older smart meters to stay smart when a household switches supplier is finally available.
‘If so, it will mean that millions of first generation meters will no longer be at risk of having to be ripped off the walls and replaced – hopefully avoiding considerable inconvenience and further expense for consumers.’