The government has announced that all homes in Britain will have new ‘smart meters’ installed by 2020.
The hi-tech meters allow gas and electricity suppliers to take meter readings remotely and together with a display device give householders real-time information on their energy use.
The industry says the new meters would see consumers using up to 3% less energy, because they would be more aware of their usage.
Savings for firms
As the companies will no longer need to send meter readers out to check customers’ meters, this will mean huge savings for the power firms.
And as smart meters should spell an end to estimated bills – suppliers are also likely to make savings by cutting back on call centre staff who deal with complaints related to billing.
Savings for customers?
Responding to the announcement, Which? energy campaigner Dr Fiona Cochrane said: ‘Smart meters are not a silver bullet – we can’t assume that just because a digital box is fitted in your cupboard, you will automatically make big savings on your energy.
‘Smart meters will only deliver real benefits to consumers if they provide useful information – such as the energy consumption of domestic appliances – and it’s up to the government to ensure this happens.’
Which supplier is best?
Dr Cochrane added that the immediate priority is that energy suppliers, the government and Ofgem take action to simplify bills and tariffs to ensure people are able to take control of their energy consumption to cut their costs and carbon emissions.
If you’re looking for a better deal on your energy then visit Which? Switch – the free energy comparison and switching site from Which?. It can help you wade through the tariff maze to find the best deal for you.
Describing the rollout of smart meters to 26 million homes and several million businesses as ‘another part of the Great British refurb’, energy and climate change secretary Ed Miliband said that consumers would also benefit from the new technology.
He said: ‘The meters most of us have in our homes were designed for a different age, before climate change. Now we need to get smarter with our energy.
‘Smart meters will empower all consumers to monitor their own energy use and make reductions in energy consumption and carbon emissions as a result. Smart meters will also mean the end of inaccurate bills and estimated meter readings.’
Smart meters will also make it easier for renewable generation to feed into the National Grid, including micro and community level generation, meaning that people with solar panels and wind turbines on their homes will be able to sell any power they generate but don’t use back to their supplier.
Costs and savings
The cost of fitting 26 million electricity and 22 million gas smart meters is estimated at £7bn.
According to energy industry sources quoted on the BBC website, the £7bn cost amounts to around £15 per household per year between 2010 and 2020. Of that figure, £10 will be accounted for in cost savings by the suppliers – meaning that the consumer will pick up the tab for the remaining £5.
However, the industry says that the average consumer is also likely to save between 2% and 3% on their energy use each year – translating as a reduction of £25 to £35 on their annual bills. If this happens in practice, households could be better off by more than £20 a year.
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