With the news that the government has announced a £10.9 billion initiative to install a smart energy meter in every home by 2020, could it help you save money on your energy bills?
‘Smart’ meters are a type of energy meter that monitors your gas and electricity usage, and has a built-in display so you can see how much energy you’re using at any one time. It also gets in touch with your energy company automatically, meaning you won’t have to deal with meter readings.
Supporters of the smart meters say that they will make your bills more accurate, as it will be calculated directly from your energy usage, rather than based on average figures like traditional electricity meters. This could benefit you if you have been overpaying for your energy, as it means you will receive a fairer bill. However, if you had been underpaying your bills, they could go up.
It’s hoped that the nationwide introduction of smart meters will lead to more personalised tariffs which can be tailored to individuals’ energy usage.
Whilst a smart meter won’t mean that your bill necessarily goes down, it may inspire you to use energy more frugally. As you can see how much energy is being used at any one time, you may think twice about leaving on all those lights in rooms you’re not in or boiling a full kettle every time when you can see how much it’s burning through the electricity.
Your energy company will organise the installation of your smart meter when the time comes, and you won’t have to pay for this service.
Cost to the public
The government initiative is set to cost £10.9 billion, and will start from autumn 2015. However, there are fears that the cost of the nationwide rollout will be passed on to the consumer. According to a report from EDF Energy, ScottishPower and npower, the cost to customers of the introduction of smart meters is said to be £1.8 billion.
Critics of the move say that the government is introducing the meters too quickly and energy suppliers will put up bills over the next ten years to cover the cost of the installation. Which? is running a campaign to suggest that the government needs to do more to shoulder the cost of the rollout plan. However, prices could actually be reduced over the long-term, as the energy companies will save money on fleets of meter readers coming out to your house.
Another criticism aimed at the plan is that the built-in displays may become obsolete in just a few years, as more and more customers will use their smartphones or tablets to see how much energy they are consuming.
What happens next
Though the rollout of the plan begins next autumn, it’s expected to take several years so you won’t necessarily have a smart energy meter in a year’s time. It depends on your region and your energy supplier, so contact them to find out when your smart meter will be installed.
If you decide you don’t want a smart meter, you should be able to refuse it. Even if you get told you need to have a new meter because the one you’ve got is too old, it doesn’t have to be a smart meter. You can ask your supplier for a new traditional meter instead, but this would mean you’d still have to manage your meter readings yourself.
Customers of British Gas, E.On, or First Utility can already get a smart meter by contacting their supplier and asking for one to be installed. However, this could prove detrimental in the long-run, as current smart meters may become outdated between now and the start of the rollout programme, so you could end up having to get your meter updated twice.
If your energy company installs a smart meter for you, and you decide you want to switch suppliers, this shouldn’t be an obstacle. Even if your new energy company hasn’t moved to smart meters yet, just switch online as normal. Your smart meter will just resort to traditional mode.
Your energy suppliers may also be able to monitor how much energy you are using and when for research or marketing purposes. If you decide you want to limit this access, you can get in touch with your supplier and let them know much data you want them to be able to see – and what they can ultimately do with it.
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Intelligent Lending Ltd (Credit Broker). Capital One is the exclusive lender.