Government rules out mandating smart meter installations

Smart meters will not be mandated in the forthcoming installations framework, except in “very specific” circumstances, the government has confirmed.

In response to a consultation on the future of the rollout, published by the Department for Business, Energy and Industrial Strategy (BEIS), the government said it considered consumer choice “fundamental” to successfully delivering the rollout and intended to retain it in its new four-year framework.

BEIS said the quality of energy suppliers’ customer journeys throughout the booking and installation process is of “paramount importance” to ensure they remain protected and derive maximum benefit.

“Forcing consumers to accept a smart meter may negatively affect the consumer journey and lead to these benefits not being realised”, it added.

The government did however state that in very specific circumstances and where it was justified, such as where energy theft has taken place, it would consider removing consumer choice.

It added that once suppliers have made sustained progress in improving operational performance and delivering “consistent consumer journeys”, it intended to consider other measures such as mandating smart meter installations for replacement connections where a meter reaches the end of its operational lifetime.

Eon UK chief executive Michael Lewis recently told Utility Week that the smart meter rollout presented an immediate opportunity for creating green jobs, but insisted the government needed to send a strong message to the public.

He said: “We have had to massively reduce our field force because of Covid-19. We have put large numbers of people on furlough because we can’t carry on with that smart programme at the moment. It makes absolute sense to drive that harder now that we are coming out the other side.

“If we want to get back to the 30,000 appointments we had before in an environment where people are nervous we need to get a bit more mandate to the system.

“By that I mean saying that if you want to benefit from government schemes like warm home discount you have to have a smart meter, or to let your house out, or eventually if you want to sell your home.

“You gradually ratchet up the requirements so you get the workforce back quick enough and it ensures that we get the benefits of the smart meter rollout.”

The four-year framework, first announced last year, will begin after the current obligation for suppliers to take “all reasonable steps” to install meters ends in June 2021 – a deadline which has been extended from 31 December 2020 due to the disruption caused by Covid-19.

From July next year, each supplier will be recognised for all the installations of smart meters that they achieve in a year. Annual installation targets will then be reset for the next year.

Installations drop 92% in May

The coronavirus pandemic has limited the rollout in recent months, according to the latest information from ElectraLink. Installations exceeded 17,000 in May, up from 12,000 in April. This represents a 92 per cent decrease on May 2019.

In order to support the uptake of smart meters, BEIS says it will work with Smart Energy GB and others to develop “targeted and more tailored engagement” with specific consumer groups, such as vulnerable consumers or those who are harder to reach. It also intends to consult on strengthening the rights of tenants to request a smart meter and is working with relevant stakeholders to develop improved guidance to developers on making provision for smart metering equipment.

According to the latest figures, 21.5 million smart and advanced meters had been installed in homes and small businesses in Great Britain as of 31 March 2020.

Smart Energy GB

In a separate consultation, BEIS outlined plans to update the objectives, governance and funding framework of Smart Energy GB, the organisation leading the rollout.

BEIS confirmed the organisation will continue in its role, adding that the nature of consumer engagement needs to change to support the rollout under the new framework. As such it is consulting on amendments to the energy supply licence conditions in relation to smart metering consumer engagement.

The proposals include rebalancing Smart Energy GB’s board, reducing its overall size and restructuring its membership to ensure a balance between directors representing the interests of energy suppliers and those representing consumers.

BEIS also proposes requiring the board to be responsible for establishing and maintaining the performance management framework (including both domestic and non-domestic standards).

The proposals include lowering the threshold for large energy suppliers to fund Smart Energy GB’s domestic campaign activities from 250,000 to 150,000 gas or electricity (or both) domestic consumers.

To allow enough time for implementation, BEIS proposes setting a target of 31 December 2021 to implement the new arrangements.