Around four million first-generation smart meters were still running in early May, more than four months after the government target to upgrade them, the National Audit Office (NAO) has revealed.
Additionally, nearly a tenth of all smart meter devices also do not work properly and a third of users have experienced post-installation problems, the public spending watchdog’s latest five yearly update on the smart meter rollout reveals.
The NAO report says on 5 May 2023, around four million SMETS 1 smart meters had still not been migrated onto the system of the Data and Communication Company (DCC), despite the government’s requirement that this process should be complete by the end of last year.
Migration to the Smart DCC central platform service enables users of SMETS 1 devices to maintain smart capability if they switch supplier.
The slow progress on migration of these legacy devices comes as the market sees a resurgence in switching levels.
Two unnamed “large suppliers” account for most of the first-generation smart meters yet to be enrolled onto the DCC central platform, according to the report, which says Ofgem is mulling enforcement action on the issue.
The NAO says the DCC told the government in September 2022 that technical limitations mean the migration of more than 500,000 first-generation meters may not be possible.
The NAO report also finds that around three million of the UK’s smart meters were not operating in smart mode at the end of this March, meaning they are “effectively indistinguishable” from traditional devices.
In addition, the NAO report includes the findings of an unpublished survey for Smart Energy GB showing that 37% of smart meter users claimed to have experienced post-installation issues with their devices, such as inaccurate bills and in-home displays not showing information.
The NAO was told about industry concerns that government-set targets to install smart meters encourages suppliers to prioritise this work, rather than fixing issues with previously installed devices.
Overall though the NAO report says there has been important progress in ensuring smart meters can function in almost all premises with the piloting of new technology that will enable the devices to be installed in all but a tiny minority of harder-to-connect sites, such as high-rise flats.
Despite this progress, the smart meter rollout has been slower than government’s ambitions with only one out of 13 large suppliers achieving both its 2022 electricity and gas installation targets.
These 13 suppliers installed a total of 3.7 million meters against their combined target of nearly five million.
Recent analysis by Utility Week found that the rate of smart meter installations must more than double to have any chance of completing the rollout by the 2025 deadline.
The report says Ofgem is currently progressing enforcement discussions with the majority of large suppliers that missed their 2022 targets.
The NAO also says both the costs and benefits of the smart meter rollout have increased since they were last assessed by the government in 2019 due to factors such as higher energy bills and a shortage of installers driving up average fitting costs.
However the report says the industry is starting to see benefits from smart meters, such as avoided site visits and fewer inbound consumer calls. Benefits for both the energy system and consumers included the Electricity System Operator’s Demand Flexibility Service, which was only available to smart meter customers.
Rocio Concha, director of policy and advocacy at Which?, said the NAO’s finding that the government is falling behind in its smart meter rollout is “disappointing”.
On reports that some people’s smart meters not working properly, she said: “It’s important that energy firms, government and Smart DCC work together to resolve these issues as quickly as possible so customers are able to get the full benefits of their smart meter.”
Dan Brooke, CEO of the Smart Energy GB campaign, welcomed the NAO’s report, which he said recognises progress on the rollout in recent years.
“The report identifies areas for improvement, but also highlights that past challenges have been largely overcome and that smart meters are helping people to reduce their energy use and save more money than ever before.”