The benefits of smart meters have been overestimated by the government, according to new data published by the National Audit Office (NAO).
Research by the company found smart meters’ net benefits have been reduced by over a quarter compared to previous estimates two years ago, now standing at £6.2 billion. The government originally claimed a net benefit of £8.3 billion would be achieved by the project. As that figure is down over £2 billion on earlier forecasts by the government, it casts doubt on the programme.
Smart meters have been tipped to revolutionise energy usage, with the government claiming in October it will allow people to get a better deal for their electricity. The government is aiming for smart meters to be in UK households and businesses by 2020, but the new report from the NAO may lead to questions about the rollout of the technology. The Department of Energy and Climate Change will now come under increasing pressure to manage the scheme closely.
NAO’s report for the Committee of Public Accounts suggested that the benefit cost ratio of the smart meters project to 2030 will be £1.60 of financial advantages for every £1 spent. However, a range of concerns were listed by the organisation, including the fact that 30 per cent of UK homes cannot yet use the current network radio system linked to smart meters.
Margaret Hodge MP, chair of the Committee of Public Accounts, said: “The department and Ofgem must stay on top of the situation to make sure that competition between energy companies actually protects customers from extra costs – especially given that the industry has already been referred to the regulator on exactly this matter.
“Given that householders are already paying eye-wateringly high utility bills, I am frustrated the department does not have a better idea of how much smart meters will help those in fuel poverty – those who need help most.”
The rollout of smart meters is not expected to start until next year, with energy and climate change minister Ed Davey explaining the technology is not quite ready for widespread usage. Despite this, Baroness Verma, parliamentary under secretary of state for energy and climate change, insisted good progress is being made.
She said: “Smart meters will give consumers control over their energy use and help them reduce their bills by providing real-time information about how much energy they are using.”
Energy suppliers themselves have been made responsible for replacing over 53 million gas and electricity meters with smart versions, with some 30 million homes and businesses set to benefit from the new technology in the coming years.
To read more about smart meters:
More from the National Audit Office: http://www.nao.org.uk/report/preparations-for-the-roll-out-of-smart-meters/
The Telegraph discusses consumer’s reactions to the smart meters: http://www.telegraph.co.uk/finance/newsbysector/energy/10885122/Homeowners-reject-energy-smart-meters.html
Find out more about the devices on the government’s website: https://www.gov.uk/smart-meters-how-they-work