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Energy companies face “severe penalties” unless they up their game when it comes to the rollout of smart meters.
Ofgem issued the warning after revealing that around half of all companies missed their electricity and gas metering targets during the first year of the current framework for the smart meter rollout.
Of the 49 suppliers covered by the policy framework, 31 failed to hit their electricity targets and 23 suppliers fell short of their gas targets.
In an open letter, Ofgem head of smart metering James Crump says: “A failure to achieve the binding annual installation targets in either gas or electricity is a breach of a supplier’s licence which we take very seriously.
“We will be contacting all suppliers who are in breach and are in the process of commencing enforcement action in line with our Enforcement Guidelines. We will take further compliance measures against suppliers as we consider appropriate.”
Crump’s letter adds that suppliers who continue to fail to meet their targets in future years could be hit with “more severe” enforcement penalties.
The Smart Metering Installation Schedule (SMIS) within the Retail Energy Code aims to ensure that consumers receive a high standard of service throughout the installation process and can use and benefit from smart metering equipment.
The current rollout policy framework began on 1 January 2022 and runs for four years until 31 December 2025. Under this obligation, all suppliers in the market are subject to binding annual installation targets which are set in their licence.
Crump’s letter sets out ways to improve performance including: hiring more installers; sharing installer resources between suppliers; increasing stock of smart meters to meet demand; and reducing installation cancellations and abortions.
Last week, Bill Bullen, chief executive of Utilita, called for the government to mandate the installation of smart meters in consumers’ homes. Bullen told Utility Week that the mandate was essential if the government hopes to complete the rollout of the devices by the end of 2025.
According to the latest figures at the end of 2022 there were 31.3 million smart and advanced meters in Great Britain in homes and small businesses. Of these, 28.1 million were smart meters operating in smart mode or advanced meters. In total just 55% of meters operating were smart despite the rollout having been ongoing for more than a decade.
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