Update on the rollout of smart meters – Report Summary

This is a House of Commons Committee report, with recommendations to government. The Government has two months to respond.

Author: Committee of Public Accounts

Related inquiry: Update on the rollout of smart meters

Date Published: 20 October 2023

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The Department for Energy Security and Net Zero (the Department) has missed its targets to roll out smart meters to homes and small businesses in Great Britain. Having originally planned to complete the rollout by 2019, as at March 2023, only 57% of meters (approximately 32.4 million out of 57.1 million) were smart in Great Britain. Furthermore, some 9% (around three million) of these were not functioning properly, while a fifth more (an estimated seven million) will lose functionality when the 2G and 3G mobile communications networks are closed if they do not receive costly hardware upgrades (the cost of which will ultimately be borne by the billpayers).

The Department has repeatedly pushed back its targets and timeframes and is now targeting 74.5% of homes and nearly 69% of small businesses to have a smart meter by the end of 2025. In 2022, the first year of a new regulatory framework intended to encourage suppliers to invest more in the rollout, only one large energy supplier hit both its gas and electricity smart meter installation targets.

There are large differences in the uptake of smart meters across geographic areas, and between demographic groups. Installation rates are lower in London, plus remote and rural areas, often—but not always—for reasons to do with the limitations of communications technology to bridge the distance between the central network infrastructure and individual smart meters, or between individual smart meters and their in-home displays. Smart Energy GB, funded by energy suppliers to engage consumers and drive smart meter uptake, has a statutory obligation to ensure vulnerable consumers are not ‘left behind’. However, its recent survey data shows lower uptake among the young, female, those on low incomes, and private renters; whereas older, male, those on higher incomes, and homeowners are more likely to have smart meters.

Ofgem, the energy regulator, is applying a traditional regulatory mindset to the rollout, focusing on supplier underperformance. This is potentially to the detriment of understanding and supporting the consumer behaviour change desirable for the success of the smart metering programme, as well as achieving broader objectives such as net zero. The Department has not published updated costs and benefits data since 2019, reducing transparency and limiting accountability to Parliament. Furthermore, it only has a plan for the Programme to 2025—even though its take-up target by then is well short of 100%—and does not know when it might be able to bring it to a close.