Can companies deliver smart customers?

Energy-behaviour anecdotes. In my local electrical store I have heard ­people told to look at energy efficiency ratings, and get the low-rated ones because they are cheaper. I know several people who put on appliances at night thinking they save money - although they are not on an Economy 7 tariff. And some businesses on an interruptible gas tariff found themselves unprepared when - you guessed it - the entirely predictable happened and there was an interruption.

These are the people whose behaviour change will apparently deliver £14 billion in savings once smart meters are rolled out. Will they really?

It’s not just ignorance and bad advice. I am sure practically everyone reading this knows people who have never switched supplier (even John Robertson, a member of the Energy and Climate Change Select Committee, says this proudly), pay by cheque, and who decline to change even if you ply them with good advice. Their behaviour has not changed over the past 20 years and it’s hard to see why it would with a smart meter.

This is a real problem. The industry is actually doing a great job solving complex practical and technical issues to roll out smart meters to every home in the country. But that will be wasted unless people realise they are getting nothing more than an enabler.

Not a single saving will be made unless the far more difficult problem of changing consumers’ behaviour is solved. That has not been a strength of energy companies, who have found it hard to get people to accept simple changes such as free insulation, even with free loft clearance thrown in. The same companies that find it so hard to deliver free warmth to people who are cold are now going to deliver them knowledge and control over their energy use. Sure they are.

Second, there is a reputational issue here. More anecdata: most people who bank are aware that an unarranged overdraft is expensive, and you could work out the real cost if you were ever minded to read the small print. But large bills for overdrafts hit the headlines recently and the banks were clobbered for it. Similarly, broadband deals with limited downloads get very bad press when customers are faced with high bills because they breached the limit. The experience from other sectors is that when flexible tariffs are ­introduced the unaware can be hit hard – and the industry will get the blame.

Third – but most important – it’s the vulnerable and unaware who are most at risk of being losers in this rollout. While eager switchers, early adopters and those who can alter their energy patterns will benefit, those who haven’t got that knowledge or flexibility could easily find themselves even further out of pocket.

With the rollout in its early stages, it’s a mistake to send out stories that say “smart meters will bring savings”. That’s far from the truth.

If we want behaviour change, we had better start giving the real ­message straight away: the smart meter is nothing; the smart customer will have to do it all.

Janet Wood

This article first appeared in Utility Week’s print edition of 28th September 2012.

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