Smart meters could still be an expensive mistake

smart metersJeff Chiu/AP/Press Association Images

A series of consultations on smart meters have gone some way to easing concerns about them - with new regulations proposed over how they are sold, and data protection measures. However, the experts are still very concerned about the costs, and whether consumers are going to end up wasting a small fortune on them.

And with 30 million poised to go into homes, it could cost you dear.

The roll-out

The aim is to install 30 million smart meters into homes and small businesses in the next seven years. These will transmit accurate information back to the provider about your energy use. It means an end to estimated bills, and that we can keep a better eye on how and when we use energy. Today's announcement means the installation will go ahead.

This has some real positives. Gearoid Lane, Managing Director of British Gas New Markets, said: "Today's announcement means that the energy revolution can now begin in earnest - giving the green light to rolling smart meters to every home and business in Britain."

Energy Minister Charles Hendry pointed out: "In less than three years energy suppliers will begin the mass rollout of smart meters across the country and I am determined that consumers are at the heart of this ambitious programme. That is why today we are proposing tough guidelines on installation, which will minimise inconvenience and help people to make the most of their smart meters to save energy and save money."

The consultations

The consultations will target the key issues critics have had of the meters: namely data privacy and sales and marketing.

Audrey Gallacher, Director of Energy at Consumer Focus, said the good news in the announcement includes the banning of sales during installation. Richard Lloyd, executive director of Which?, agreed. He said in a statement: "Which? has been calling on the energy industry not to use the £11 billion smart meter roll-out as an opportunity to go for the hard sell, so we're pleased that the government has listened to consumers and banned selling during the installation visit."

Meanwhile, a separate consultation, will specify that companies can only use the information from the meters for billing and other regulatory purposes - unless the customer gives them permission to use it for other purposes.

Gallagher is also pleased to see more effort will go into education, so people get full benefit of the information their meter produces: "It is welcome that the Government has recognised the need for a much stronger and better co-ordinated strategy to engage consumers. Smart meters will only help people to become more energy efficient and cut their bills if they are able to easily understand and use the new technology. We hope this move will pave the way for a support scheme for vulnerable customers to ensure everyone gets the benefit of smart meters."

The questions

However, one big question mark remains. Gallagher says that her concerns over costs have not been allayed, saying: "We continue to have concerns that the costs of the scheme may be underestimated and that costs for consumers could rise. Consumers need transparency and accountability over the costs of this scheme to make sure the Government keeps these in hand - competition alone will not deliver cost efficiencies."

Which? agrees, and has called for a pause in the roll-out. It said in a statement: "We'd like the government to take control and make sure that costs don't spiral as they will eventually be passed on to consumers through their energy bills."
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