Smart meter manufacturers may quit Britain due to slow rollout

The slow pace of the smart meter rollout in Great Britain is prompting manufacturers to exit the UK market.

That is according to Yselkla Farmer, chief executive of energy and infrastructure trade association BEAMA, who was speaking to Utility Week in the wake of new research by LCP Delta which analyses how the GB rollout compares to that of other European countries.

It found that engagement levels amongst smart meter customers in Britain compare well with their European counterparts, but “there is still a long way to go to achieve 100% uptake”, with government figures indicating 36% of GB homes are still without electricity smart meters.

Farmer said she had spoken with various manufacturers who suggested they may leave the GB market if the rollout slows down further, but declined to name which ones had these concerns due to confidentiality reasons.

She further warned about the impact this will have on other aspects of the energy transition, such as the installation of electric vehicle (EV) chargers and the electrification of heat.

The BEAMA chief executive said: “What’s happening on the metering side does risk other capacity building exercises we need to be doing on products that surround the meter programme and the energy transition.

“Predominantly, it’s just an issue with the fact that the programme has slowed down. We are reaching a stage in the programme where all the effectively easier installs have been made…we’ve got 30-40% of the customer base now that will be more challenging to reach out to and install meters in their homes.

“On the supply chain point, for all of our members, the metering network is a key enabler for the energy transition… the market for low carbon heat, the market for smart EV charging, does in some way depend on ensuring we have a complete meter network in the UK.”

The analysis highlights how countries such as Spain, Italy and France have mandated smart meter rollouts and are therefore much further ahead than GB, which has adopted a retailer-led approach.

Asked whether Britain should follow the example set by its European neighbours, Farmer expressed caution.

She explained: “The right way is to educate consumers and help them understand what value it has to them so that they open their doors to this new infrastructure. Once the infrastructure is in place, we also want these customers to engage in the market.

“The whole point of it is, for us to not have to build loads of new generating capacity we need customers engaged in a demand side market and the way to do that is to get them engaged with their energy data.

“It’s a big challenge but it’s an important part of the UK rollout that we should hold on to.”

LCP makes a number of recommendations to combat the barriers being faced by the rollout:

• Smart Energy GB must raise awareness and use targeted communications that outline the value and clearly articulate the benefits of smart meters to reach hard to engage consumers to drive uptake;
• Energy retailers need to offer attractive smart meter enabled propositions to consumers that give them more control and lower energy bills;
• Government needs to hold suppliers to account and show commitment to the smart meter rollout, giving confidence to metering companies to invest in the UK market;
• Energy regulators must address data privacy concerns and reassure consumers that the UK has a robust smart meter infrastructure in place that provides a high level of resilience and protection.

David Trevithick, head of digital at LCP Delta, commented: “Our analysis indicates that we need both a full smart meter rollout as well as engaged customers. They are not mutually exclusive.

“The risk of mandates is unengaged customers, while the risk of a customer opt-in approach is that the full smart meter rollout takes another decade. The challenge for policymakers is to engage the remaining customer base to achieve a full rollout more quickly than a natural meter replacement cycle.”

Responding to the findings, a Smart Energy GB spokesperson said: “Smart Energy GB’s work includes dedicated, targeted campaigns to reach people in vulnerable circumstances including people who prepay for their energy, as well as those who both rent and own their home. This approach is working, with data showing smart meter ownership levels among almost all major vulnerable groups, including those on prepay and those in fuel poverty, are in line with the GB average.

“Independent research shows that half (50%) of smart meter installations are due to Smart Energy GB’s activities. This demonstrates that our coordinated campaigning activity is having a huge, positive impact. There is of course still more work to be done.”

An Ofgem spokesperson added: “The way we use energy will look very different in the future. The smart meter rollout is an integral part of moving to a cleaner, more efficient energy system, and empowering consumers to understand their energy use, and access innovative smart tariffs that could save them money.

“Suppliers are responsible for meeting their annual installation obligations and making sure their customers’ smart meters operate correctly, and we expect them to communicate with their customers clearly if there are any issues with their smart meter. If customers have concerns about the way this is handled, they can complain to their supplier, and if the issue is not resolved to their satisfaction, they should raise it with the ombudsman.”

Meanwhile, a Department for Energy Security and Net Zero spokesperson said: “The rollout is making good progress, with around 85,000 smart meters installed across Great Britain every week.

“We have set energy suppliers ambitious but achievable minimum installation targets to make sure as many consumers benefit as possible.

“We expect energy suppliers to meet these targets, and welcome necessary enforcement action taken by Ofgem if targets are not met.”