Pros and cons of energy smart meters

How much money could one save you?

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The government is pushing energy suppliers to ramp up the installation of energy smart meters; while around seven million have been fitted so far, by 2020 around 26 million homes are expected to be fitted with one.

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The Queen's Speech even included confirmation that there will be a dedicated Smart Meter Bill in this parliament.

But what are they? And will they really mean lower energy bills?

How does a smart meter work?

At the moment, energy bills rely on meter readings, often supplied by us the customers. It's not exactly the most rigorous, accurate system since without meter readings you supplier will essentially guess how much energy you are using and so what they should be charging you.

Smart meters should remove that uncertainty, automatically taking readings on a daily basis and then sending them onto your supplier. You will then only be sent accurate bills, and from 2020 the idea is that suppliers will be able to offer you tariffs based on your actual usage.

You will be able to make practical use of the smart meter too, via its 'in-house display' which will show how much gas and electricity you have used over the last hour, week and month, as well as how much you've spent on your energy use.

Some smart meters will also allow you to set specific goals for reducing your energy consumption.

The hope is that smart meters will mean lower - or at least more accurate - billing, as well as giving households the information they need about their energy use to take steps to reduce how much they use.

The Department for Business, Energy and Industrial Strategy (BEIS) reckons that by 2030 smart meters will save the average household around £43 a year on their energy bills.

Installing a smart meter

Suppliers are currently busy contacting households across the UK to try to arrange smart meter installations. An engineer will be sent out to set up the smart meter in your home; they will generally be found where your current gas and electricity meters are set up, though if they need to be placed somewhere else the engineer will have to get your permission first.

Do I have to have one fitted?

While your supplier might be awfully keen for you to get a smart meter installed, you aren't obliged to do so.

Smart meters are already affecting our bills

Fitting a smart meter obviously costs money, and while there is no upfront cost for getting one installed, the installation cost will be 'absorbed' into your future bills.

However, costs associated with rolling out smart meters are already having an impact on the bills of millions of households, whether they have one or not. A number of energy suppliers specifically mentioned smart meters when announcing price rises this year, with Scottish Power saying they accounted for £10 of the average £86 price rise seen by its customers.

The problems with smart meters

There are a host of concerns around smart meters.

For starters, there are understandable fears about just how secure the information is.

Smart Energy GB, the body overseeing the smart meter industry, points out that the data taken by a smart meter is "strongly protected" by law, and that homeowners have control over it, including the right to decide how often information is sent to your supplier, whether they can share it with other organisations (like price comparison sites) and whether they can use your readings for sales and marketing purposes.

However, as with all 'smart' technologies, there are concerns around whether smart meters could potentially be hacked. Last year, Netanel Rubin, co-founder of the security firm Vaultra, described smart meters as "dangerously insecure", warning that there are not enough security features in place.

Then there is the fact that around 250,000 smart meters which have been installed are not actually operating in 'smart mode', essentially replicating the service offered by traditional energy meters, according to the BEIS. This is down to 'technical issues' but the idea of having to pay more and potentially not reap any benefits is not a compelling one for most of us.

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