Opinion Wouldn’t it be great if you knew how much your gas and electricity were costing you minute by minute by looking at a smartphone app, visiting a website or glancing at a wall display?
You’d be in a much stronger position to reduce your energy bills and switch suppliers if you could. Thankfully, this data will soon be accessible to consumers through smart meters, set to be rolled out across the UK by 2020.
This information will help build a competitive energy market based on consumer pressure, but I worry that the smart meter roll-out could ultimately prove to be expensive, restrictive and unnecessary. There are better solutions.
What are these things?
What are smart meters? Smart meters sound like a great idea in theory. They will let us see how much energy we’re using on a day-to-day basis, what appliances are to blame for our high bills, and how we can make our homes more efficient. That’s obviously helpful – seeing how much energy we use will also empower us to change their suppliers and get a better deal.
But, sadly, lots of people have overlooked what the smart meter roll-out will actually involve. Many think these new meters will simply "attach" to their current set-up, recording and feeding readings to their phones or tablets. This is not true. Smart meters are brand new pieces of kit – they’ll replace the meters that we currently have in our homes, and replacing this equipment will be expensive.
The smart meter rollout is expected to cost about £11bn, according to Department of Energy estimates – £215 for every household in the country. And it is energy users who will pay through higher energy bills over the next few years.
An alternative that takes advantage of new technology
When the plan for smart meters was originally drawn up by Ed Miliband as Energy Secretary in 2010, there were fewer technology options. I believe that we need to take the time to reconsider the smart meter roll-out in light of what is now possible with the newer technology available today.
If possible, we should look for a less expensive solution that gets the same job done. For example, rather than seeing your energy use on a wall unit, why shouldn’t you be able to view it online or through a mobile app instead? This would save us the estimated £228m cost of installing in-home display units (IHDs). Rather than installing a whole new meter, why can’t we just stick a small camera or reading device onto your existing meter which can regularly record and transcribe the current meter reading? And why can’t we just use an approved smartphone app for ad hoc readings today? This is now perfectly feasible and these readings should be accepted by the energy suppliers.
The House of Commons’ Public Administration Committee (PAC) and energy suppliers have both flagged up similar concerns. For example, the Chair of the PAC has said that smart meters are already “out-of-date,” and the energy company EDF has said that a smartphone app would be quicker to roll-out and cheaper for consumers.
Writing policy for fast-moving technology
Legislation moves too slowly to keep pace with technology. If the Government persists with the current smart meter roll-out, we could easily find ourselves writing laws for a world that has completely changed.
We should legislate for the outcome, not a specific technological solution. We need better real-time information openly available and easily accessible for householders and businesses. Then consumers can use it to pick and switch energy suppliers at will. There are many paths up a mountain and we shouldn’t proscribe one rigid state-driven route that may prove more long-winded than the many footpaths on the other side.
Why not allow tech companies and entrepreneurs to compete to find the best way to monitor electricity and gas usage? Better choice will help customers make the best decision for themselves. Government’s job is then to ensure that technologies and companies compete fairly to provide customers with the best service.
Supercharging competition between energy companies
If we want to empower people to switch energy suppliers, we must also go further than just providing customers with better information. We also need to streamline the amount of bureaucracy and cut the time it takes to switch suppliers.
I know from painful personal experience that switching suppliers can take months; four months at my last attempt. If inertia reigns, the only winners are the “big six” incumbent energy companies. Smaller and cheaper energy providers are emerging to challenge their hegemony. While switching remains so difficult, the behemoths can continue to rest easy. Why can’t we switch supplier within the hour with our meter reading? This is not rocket science! Provided there are some basic checks it would save an awful lot of time and hassle for everyone.
It seems to me that the current concept of smart meters is outdated. They are a rigid and expensive solution dreamt up by bureaucrats in a former era. New technology has revolutionised the field of play; we must embrace it to drive down prices, hand power to consumers and prevent the big energy suppliers from monopolising the market.
Adam Afriyie is the Conservative Member of Parliament for Windsor and president of the Conservative Technology Forum.