‘Seismic shift’ needed to break smart meter ceiling

A “seismic shift” in thinking needs to come from government if the energy sector is to hit its smart meter targets, an industry expert has warned.

It comes as the latest figures from Electralink show that smart meter installations appear to have hit a ceiling in the past three years, with the total number of annual installs levelling out.

Electralink’s figures show that more than 2.4 million smart electricity meter installations were recorded in 2023, a fraction higher than the 2.37 million installs in 2022 and marginally lower than 2021 which saw 2.41 million installs.

Suppliers have until the end of 2025 to complete the rollout. The government originally planned to complete the rollout by 2019 but as of the end of September 2023 just 59% of all meters were smart or advanced meters, according to the latest figures from the Department for Energy Security and Net Zero (DESNZ).

DESNZ has pushed back its smart meter targets on several occasions, most notably as a result of the pandemic, and is now targeting 74.5% of homes and nearly 69% of small businesses to have a smart meter by the end of 2025.

Speaking to Utility Week in response to the latest figures Jeremy Yapp, policy & regulation director (UK & EU) at smart electric vehicle charging app ev.energy, said the numbers were “fine and they are not a cause for panic or alarm”, but that he did believe the government needed a rethink.

“If you were looking at other rollouts, you might have anticipated a softening of these numbers and that hasn’t happened. I think that is really good and that speaks to the long term desirability of the smart meter as a consumer engagement tool,” he said.

He added: “However if the government thinks the current pace is good enough to fill this country with smart meters in the way we need to then it needs to think again. So if we really do want to meet those targets that we have set ourselves and if we do want to make sure that consumers are in the best position to take advantage of Market Wide Half Hourly Settlement (MHHS) when that is delivered then maybe we need not to panic but to look at something different.

“We need to change this up because current trajectories are clearly not going to deliver a significant increase in smart meter penetration in time for MHHS. So the government needs to do something else.”

Yapp suggested there was an opportunity for government to “think about big messages about electrification and big messages about smart energy management and energy efficiency”, adding that the country needed a conversation about how it uses energy better.

In agreement with Yapp is George Walters, chief home services officer at Utilita, a prepayment meter specialist energy supplier which has 92% of its customer base connected to a smart meter.

He said: “Certainly we’re at that place now where suppliers are only able to make marginal improvements to their installations, their engagement with customers, and ultimately that’s never going to get us to where we need to be.

“There needs to be more of a seismic shift or a step change which has got to come from government really, essentially to move from where we are now to a place where we’re ultimately pretty much fully installed like Utilita is.”

Both also acknowledged that the number of smart meter installers is another contributing factor to low take up.

“We have a skills problem. So you could have the meters in a warehouse, you could have the customers calling the helpline saying ‘please install a smart meter’, both of those things could be true, but you might not have the people with the vans to go out and install them,” said Yapp.

“There is certainly shortages of installers, absolutely, there is a skills shortage there,” added Walters.

Meanwhile Tom Woolley, smart product & strategy director at energy infrastructure company and smart meter installer SMS, said that in order to achieve the “ultimate 100% goal” of smart meter coverage, “it is not unforeseeable that a change in tack to existing rollout obligations may be required”.

He spoke about the collaborative efforts of energy suppliers working under Alt Han – the government regulated, not-for-profit collective of UK energy suppliers – which was established to overcome the industry’s technical installation challenges.

Woolley told Utility Week: “The fundamental challenge for the government and energy suppliers continues to be one centred around the effective communication of the benefits of smart metering to the remaining consumers. However, in part, it is also a huge technical challenge, with at least a million UK households requiring extra solutions and support to access smart meters due to certain technical installation and network issues.

“To this point, over the past 12 months, the industry has shown how it can club together to overcome these obstacles through innovation and collaboration, with all UK suppliers – under the guise of Alt HAN – and leading meter equipment managers all working in unison to come up with solutions that effectively address these rollout roadblocks. I believe this collaborative approach could signal the way forward, to deliver the remaining smart meters in a more effective, efficient and collaborative manner.”

In response, a DESNZ spokesperson said: ”The rollout is making good progress, with almost 34 million smart meters installed, allowing consumers to manage their energy use and save money, while also delivering on our commitments to net zero and energy security.

“We expect suppliers to rise to the challenge, so they meet their obligations and go further to progress the rollout. Ofgem have also taken a robust approach towards companies failing to meet targets.”