By the end of 2020 around 53 million smart meters are mandated to have been fitted by energy suppliers. But with only around 10 million installed to date, the national roll-out must ramp up dramatically, and soon.

Negative media coverage and a lack of consumer understanding and awareness have contributed to stilted progress. Regardless of this, the government has laid down the gauntlet and suppliers are investing heavily to meet the challenge. How well their efforts are being rewarded forms an ongoing programme of research. Utility Week has teamed up with Harris Interactive to examine the latest consumer attitudes to smart meters and in doing so provide valuable insight into the best approach to overcome the challenges presented by the roll out.

Harris originally launched a survey in April 2017 to a nationally representative audience of just over 1,000 consumers, in order to understand better the experience of those who have a smart meter installed and glean the sentiments of those who haven’t. This was repeated in November 2017 and April 2018 to see how perceptions have changed.

Executive summary

Suppliers have been told by the government to “take all reasonable steps” to try to install smart meters in all the UK’s 50 million homes and businesses by the end of 2020. If they fail to do enough, they face fines of up to £7 billion. But the Harris research found 31 per cent were not interested in getting a smart meter, which was up from 25 per cent last November, and 28 per cent this time last year.

Three in ten of those who say they have not been offered a smart meter, or have been offered the opportunity to have one but have decided against the installation, say that they are simply not interested.

This a significant increase from a quarter of respondents who answered the same question the same way in the last wave of research in association with Harris, which was conducted in November 2017.

In addition, the proportion of this group who like the idea of getting a smart meter has also fallen in the last six months, down to 45 per cent from 52 per cent.

Eight per cent of consumers are worried about installing a smart meter. This is despite suppliers reportedly resorting to ‘bully boy tactics’ in response to the low appetite for smart meters. Money Mail’s Stop The Smart Meter Bullying campaign said “suppliers are becoming desperate to persuade more people to sign up”. You might want to say that these are the sort of headlines suppliers are constantly up against.

Responding to the results, Mark Brenton of Harris Interactive says: “This research shows that over 4 in 10 of those offered a smart meter have not had one installed yet, which suggests that there is still a general apathy amongst consumers around smart meters.”

Added to this, a significantly lower proportion of this group said that they liked the idea of getting one installed compared with the last wave. But worryingly, although those that have a smart meter say they are more interested in energy use, still only 3 in 10 are saying that they have enjoyed saving money on their energy bills since getting one installed and there are still 3 in 10 saying that the smart meter has had no impact.

Brenton says: “This continues to show that further evidence might be needed, ideally financial, to convince the majority who still don’t have a smart meter that getting one is worthwhile.”

The report concludes that the primary challenge of providing non-smart meter owners with a compelling reason to get one installed is still apparent. Only 3 in 10 of those with a smart meter state that they have enjoyed saving money on their energy bills since getting one installed, and around the same number still say that the smart meter has had no impact. This continues to show that further evidence might be needed to convince the majority who still don’t own a smart meter that getting one installed is worthwhile.

And in further damning news for the rollout, it emerged last month that smart meters will save customers just £11 a year on their energy bills due to delays and rising costs, according to a report by The British Infrastructure Group (BIG).

The BIG, a group of MPs and lords who work to promote better infrastructure across the UK, said delays and rising costs mean the net benefit of the national smart meter roll out has fallen, and the expected saving on an annual dual fuel bill in 2020 will be just £11, rather than the £26 that was previously reported.

But on a more encouraging note, the findings also show that the proportion of consumers having been offered a smart meter, as well as those choosing to have one installed is increasing slightly.

But the most positive story lies in offer and installation. Both are increasing – but over 4 in 10 of those who have been offered a smart meter have not yet had one installed.

And overall the experiences of those who have had a smart meter installed appears to be similarly positive as those seen in the previous wave, with three-quarters of consumers liking the idea of getting a smart meter.

Concerns over installation are still apparent but not increasing. Less than 1 in 10 now claim they required a second visit to have their smart meter installed, and the same proportion as last wave (16%) say they experienced billing problems after installing a meter.

These issues have not subsided since the last wave, which would suggest they still need to be monitored moving forwards, to ensure they do not hamper the smart mater rollout unnecessarily.

Key findings

Smart meter penetration

The overall findings show more people are being offered meters and more are agreeing to have them installed, which is certainly encouraging news.

The proportion of consumers who have been offered a smart meter and those having one installed is increasing slightly – but the operative word there is slightly. 93 per cent of respondents say they have now been offered a smart meter, which is encouraging. But of those respondents, 38 per cent still say they do not want one installed which has fallen slightly from our last survey. In November 2017 41 per cent of those who had been offered a smart meter said they didn’t want one, and 53 per cent said they did.

As Robert Cheesewright, director of Policy and Communications at Smart Energy GB, says in response to these findings: “Smart meters are replacing an outdated analogue system that is no longer fit for purpose, putting an end to estimated bills and people having to crawl under the stairs with a torch to take a meter reading.”

Views of those with other smart tech

The statistics here are both positive and encouraging – it would seem those who have other smart tech in their home are far more open to the idea of having a smart meter.

Ninety-nine per cent of those with other smart tech in their homes were not worried about installing a smart meter, which is fantastic for the roll-out.

Similarly, 92 per cent with other smart tech were interested, and 7 per cent of that same group wanted to find out more before going ahead.

This bodes well for energy suppliers, as the prevalence of smart tech in homes across the country continues to increase, and with it (if these findings are representative of the nation’s sentiments going forward), the willingness to consider installing a smart meter.

In November 2017 10 per cent of those with other smart tech in the home weren’t interested in having a smart meter installed, and 6 per cent wanted to find out more before proceeding. So while it may be encouraging that those with other smart tech are more likely to consider having a smart meter, this state of play has remained largely in stasis over the last six months – not quite the ramping up of installation figures both suppliers and the government would like to see.

But Cheesewright seems unconcerned about this apparent reluctance. He says: “It’s completely understandable that people have questions and concerns about new technology like smart meters – just as we did with online banking and contactless payment cards, which are now part of our day-to-day lives.

“But our independent survey of almost 10,000 people across Britain shows that people who have already upgraded to smart meters love them. Almost three quarters would recommend one to family and friends, and more than eight in ten have taken steps to reduce energy.”

Thoughts on the process and installation

The installation process continues to be seen as relatively straightforward by most, whilst overall satisfaction levels for the service and information from the installer have continued to improve.

Encouragingly, 95 per cent of those who had a smart meter installed found the process reasonably or very straightforward. This compares to the same percentage of those surveyed in November 2017.

Elsewhere, 65 per cent were very satisfied with the installation process, compared to 63 per cent in November and 43 per cent in April 2017. 92 per cent only required one visit to install their smart meter. This compares to 91 per cent in November and 87 per cent last April.

These results show the installation process appears to be steadily improving with each new wave of research, and suppliers should be encouraged by this. It is true to say though that the pace of change is neither dramatic nor groundbreaking, but in the face of ongoing, (and if anything increasing) negative sentiment surrounding the “bullying tactics” employed by suppliers through the installation process, there are positives to be drawn here.

Billing problems

Billing problems remain a sticking point. They will not only put a negative slant on the continued efforts of the smart meter rollout, but are widely acknowledged to have a very real impact on the general relationship between supplier and consumer. Confusing and convoluted bills will only act to fuel mistrust between the two. This is not a new issue, and is certainly not one that suppliers are unaware of, but the fact that it remains so prevalent in our survey speaks volumes. Further action is required, and perhaps a whole new school of thought when it comes to clear and comprehendible billing.

17 per cent of those who had a smart meter had experienced billing problems. This compares to 16 per cent in November and 12 per cent in April 2017. Does this perhaps suggest that suppliers are not making enough efforts to resolve continued billing issues? Or are they perhaps going about attempting to resolve these issues in the wrong way.

Some of the comments given by participants who had experienced billing problems:
– “I’ve been overcharged.”
– “The installers are having difficulty taking readings due to a poor signal and my bills have increased considerably.”
– “My billing is never consistent.”
– “My smart meter has recently stopped sending readings to supplier.”
– “I had a wrong bill due to my meter breaking.”
– “The meter would normally charge more than we use electricity and gas.”
– “It seems to be much more than before and as my meter isn’t within range everything is estimated and I still give readings and I’m not very impressed.”
– “I was asked to increase my direct debit when actually this was not necessary.”

Two thirds (66 per cent) say they are unaware the smart meter rollout is being funded in part by a contribution in their bills, which is more or less consistent with the last two surveys (68 per cent and 61 per cent in November and April 2017 respectively)

Some of the comments given by participants as to their views on smart funding through their bills:
– “I’m not happy about this, unless it means that, in the long term, bills go down.”
“Mild annoyance if have to pay for cost of other meters, if don’t want one installed yourself. Depends on degree of additional cost however.”
– “I think there is a large contribution from the Government’s carbon reduction fund so the contribution from customers is hopefully relatively small.”
– “Cheated. I do not want one and do not want to pay for other people to have one.”
– “Has to be funded from somewhere, was under the impression it was government.”
– “Not good, the supplier should have checked with the customers before doing this.”
– “I don’t like the idea that we are subsidising the company’s roll out of smart meters when the company should be paying for it.”

Benefits and impact

Better visibility of energy costs are still seen as the main benefit of having a smart meter, with motivation to be more energy efficient in second, followed by savings on energy bills. Being more interested in energy use is still the biggest motivation for installing a smart meter, while around 1 in 3 continue to claim that having a smart meter has had no impact on them.

But Cheesewright counters that “Smart meters help people save energy – on average 354kWh of energy per year – that’s enough to power a house for a week or a mobile phone for 177 years.”

Perhaps the issue here is that this benefit is not being conveyed enough in the media, or that once installed, smart meters are not making the ‘before and after’ difference clear enough to the consumer, so that they can appreciate the money saving benefits they’re receiving.

Having said that, 63 per cent did say having a smart meter makes them more interested in their energy use. This compares to 53 per cent in November and 51 per cent in April 2017, so the money saving message is getting through, albeit slowly.

So the results point to a growing awareness of energy use, with a significant increase in the percentage of consumers who say that having a smart meter makes them more interested in energy – but interestingly only 7 per cent surveyed say having a smart meter made them want to change supplier, compared to 15 per cent who said the same thing in November, and 23 per cent who said it in April 2017.

This flies against the assertion that smart meters will increase switching and therefore trust in the market, but does not necessarily point to a lack of engagement – it may just mean only 7 per cent realised they were not on the best possible deal for them, while others were made aware of their deal and chose not to switch elsewhere.

But when it comes to satisfaction levels among smart meter users, 62 per cent polled by polling company D-CYFOR say they rate their smart meter at seven out of ten or more. The survey also reveals that of those that have a smart meter, 52 per cent say they have not had any issues with it.

However, when it comes to complaints, the number one issue for those with a smart meter in that survey is that they say they have not managed to save any money (13 per cent). The number two issue is that they have trouble understanding how to use their smart meter (10 per cent) and the number three issue is that their energy supplier can’t get their meter reading (6 per cent).

Views of those who have not had a smart meter installed

We turn now to the perceptions and attitudes of the sixty two per cent who have yet to install a smart meter, where the results show that a third of those who don’t have a smart meter are currently not aware of the government mandated scheme at all.

But thgood news is that only 1 in 10 don’t know what a smart meter is, meaning ninety per cent do.

Furthermore, just under 1 in 10 claim they didn’t know what a smart meter was before taking part in the survey. This is despite millions being spent on the communications campaign to get this message across to the market. This is reinforced by the results below.

But D-CYFOR’s survey found awareness of energy smart meters in the UK is high, with 95 per cent of the general public saying that they have heard of them. And 63 per cent of participants in that survey said they have heard of smart meters but do not yet have one.

The survey goes on to reveal that 53 per cent of those that do not currently have a smart meter say they are not looking to get one in the next year, 23 per cent say they are looking to get one in the next year and 25 per cent say they “don’t know”.

Among the 53 per cent that do not want to get a smart meter in the next year, the number one reason is that they do not think they will save any money by getting one (26 per cent). The number two reason is that people think that having a smart meter could make it harder to switch gas and electricity suppliers (17 per cent). Thirdly, 12 per cent say they do not want a smart meter as they do not think they will save energy by having one

Feelings about having a smart meter installed
– 45% like the idea of getting a smart meter, but this is down from 52% in November 2017
– 31% say they are now not interested in getting a smart meter, which is up from 25% in November
– But 8% are worried about installing one, compared to 6% in November
A consistent 2% already own other smart tech that they think is better

Conclusion

The survey paints a picture of an increasing resistance to the smart meter roll out, although progress is being made. Back in June MPs argues that the government must take action to address the slow progress of the smart meter rollout. They said then that on the current trajectory, the target of offering all households a smart meter by 2020 will not be met.

“I don’t think we will hit the target realistically, and I think there needs to be a good look at why,” said Antoinette Sandbach, chair of the Business, Energy and Industrial Strategy (BEIS) Committee.

She said there is a “real concern” that consumers are not buying into the scheme because of a mistrust of suppliers and that more work needs to be done to promote the benefits.

Labour shadow minister for energy and climate change, Alan Whitehead, drew attention to the low rate of SMETS2 installations in particular, noting that the cumulative total had only risen from 250 in November to 1,000 in June.

He joked that if installations continued at the same pace the smart meter target would be reached in “under 6,000 years”.

Whitehead warned that the industry is approaching a “cliff edge” where “SMETS1 ordering stops, and so they stop being produced”. He said SMETS2 meters are not being produced in sufficient numbers and that a situation will emerge “in about a year’s time” in which “there will be empty vans going around for installations.”

He claimed the government is currently “paralysed” and merely “hoping somehow that the SMETS2 meters are going to turn out to be ok.”

The primary challenge of providing non-smart meter owners a compelling reason to get one installed and being able to save money on their energy is still apparent. Only 3 in 10 of those with a smart meter state that they have enjoyed saving money on their energy bills since getting one installed, and still around 3 in 10 are saying that the smart meter has had no impact. This continues to show that further evidence might be needed, ideally financial, to convince the majority who still don’t have a smart meter that getting one is worthwhile.

But in response to the findings, an Energy UK spokesperson remained buoyant: “Energy companies are working hard to enable as many people as possible to experience the benefits that smart meters bring and to ensure the rollout is carried out safely, efficiently and cost-effectively. Suppliers remain committed to meeting the government’s deadline of ensuring all households and businesses are offered a smart meter by 2020.”

Only time will tell if this optimism is enough to carry suppliers safely past their targets.