Source · Select Committees · Public Accounts Committee
Recommendation 2
2
Accepted
Update smart meter benefits evidence and assess how to maximise gains for all consumers.
Conclusion
We are concerned that smart meters are not achieving the consumer benefits they are supposed to and are benefitting certain, often wealthier, consumers more than others. The Department’s most recent estimates of consumer energy savings are based on data from installations that took place between 2015 and 2018 (with consumption data up to 2019). These show energy reductions of 3.3% to 3.6% for electricity and 2.9% to 3.1% for gas. However, the Department needs more up- to-date data to be confident that smart meters are saving consumers money on their energy bills, as it anticipated. If consumers are older, male, on high incomes, or homeowners then they are more likely to have smart meters. Wealthier people are also more likely than less wealthy people to be able to purchase new replacement appliances (such as washing machines) if their smart meter suggests relatively high running costs of older appliances they may own. Previously, there special smart meter tariffs were available that offered lower prices, for example for off-peak consumption —owever, these have been withdrawn due to current conditions in the domestic energy market, thereby removing an incentive for smart meter installation. Recommendation 2: The Department should: • update its evidence base on the benefits consumers are actually receiving; and • carry out further assessment of how to maximise the benefits of the smart meter network for all consumers, particularly those groups currently less likely to have them to encourage them to apply for one. 6 Update on the rollout of smart meters
Government Response Summary
The government agrees and has published an independent evaluation in Summer 2023, which identified energy savings. They are also designing a new phase of program-wide evaluation and working on additional sources of evidence to supplement the existing data.
Government Response
Accepted
HM Government
Accepted
The government agrees with the Committee’s recommendation. and evaluation which includes recent published evidence on energy savings and consumer benefits. Further substantive evaluation research to complement this is currently in development. An independent evaluation of evidence on energy savings for households resulting from smart meters carried out by the Department’s Behavioural Insights Team was published in Summer 2023. This identified savings of 3.4% for electricity consumption and 3.0% for gas, in line with the programme’s assumptions of 3.0% and 2.2% for credit consumers. Wider consumer benefits were explored in recent published evaluation which focussed on consumers who may experience barriers in the energy market (e.g., those on lower incomes). A range of additional benefits were identified, such as the ability to top up and access balance information remotely offered by smart pre-payment meters. This evidence was collected as part of an ongoing programme of data collection and monitoring capturing benefits across the roll-out, including energy consumption reductions, credit and pre-payment consumer experience, demand side response and flexibility and savings accruing to industry. To supplement the department’s existing evidence base, DESNZ is in the process of designing a new phase of programme wide evaluation which will capture evidence on existing benefits in addition to potential further benefits resulting from innovation enabled by smart metering. Work to provide additional sources of evidence on energy savings is also underway, including testing the potential of the Department’s National Energy Efficiency Data framework (NEED) to provide estimates of impacts.