Water companies must promote smart meter benefits to businesses

Water companies and retailers need to do more to persuade business customers of the benefits smart metering can bring, a study has found.

The report by CCW showed the majority (91%) of organisations with a smart meter installed recognised its value. However, smart meter penetration is low – with 73% of businesses still on older-style meters.

Financial over environmental benefits were valued by businesses and many did not realise broader features.

Despite a perception of smart water meters being valuable, many customers did not know how smart meters differed from older style meters. CCW said the benefits are not recognised, or are underappreciated.

The water watchdog said a smart meter rollout needs an emphasis on properly communicating the potential benefits, whether financial, environmental or organisational, particularly to smaller businesses.

The research was done by CCW with market operator MOSL on behalf of the Strategic Panel’s metering committee to understand views of business customers on if the advantages of smart metering are understood and used.

The non-household sector accounts for around one-third of the water consumed in England and Wales, but water companies have not been incentivised to promote efficiency. For PR24 distinct commitments to lower consumption for non-household users will be included for the first time. 

It showed 82% of organisations would support a rollout of new technology across water networks, with strongest support from those businesses with highest water bills and operate multiple premises.

Tangible financial benefits were deemed the most appealing such as accurate bills, quick identification of leaks and ease of meter reading. Environmental advantages, future planning and peace of mind were seen as “nice to have” rather than essential.

“Our findings were encouraging, in that there is a sense among businesses in general of the potential for greater financial and operational efficiencies through the use of a smart water meter. Moreover, among businesses that already have smart metering, a clear majority (91%) found that it provided useful information,” said Mike Keil, director of policy, research and campaigns at CCW.

“However, the research also made clear the very real extent to which smart water metering is an unfamiliar concept to many businesses. Understanding of AMI technology is poor, meaning certain benefits regarding time and cost savings, as well as greater energy efficiency, may be underappreciated or unknown to many.”

Saving money and bill management were highlighted by customers as the advantages of the devices, while environmental benefits were not identified as such. Awareness of how smart metering helps the environment was low but organisations did identify being environmentally responsible with water as part of civic duty.

Participants were asked about the advantages they perceived of having a smart water meter installed. Switching water retailer with accurate metering data was seen as a prominent advantage by those with a smart meter (72%) versus those without one (49%). Better tariff advice was identified by 21% more organisations with a smart meter than without; while drought planning was seen as useful for 73% of those with a device, but on 53% of those without.

Respondents cited billing, costs and payments as plus-points to having a meter, but the majority did not know what other benefits would come.

The research involved both qualitative and quantitative surveys taken in January and February of micro, small, medium and large businesses with annual water bills ranging from under £1,000 to more than £6,000. Half of respondents (75%) paid less than £6,000.