The main problem highlighted by the NAO is that the home area network radio system is not suitable for up to 30 per cent of premises, although the suppliers are developing a different solution for these premises.
The NAO also stated that some supplier have not yet developed smart prepayment systems, and has questioned whether the suppliers, network operators, and supply chain’s readiness for large-scale installation.
The smart meter rollout programme will see 53 million smart gas and electricity meters installed into households and businesses by 2020.
In an update on the progress made ahead of the mass rollout, the NAO also noted that only two of the big six suppliers had installed a “significant number of meters”.
Decc is also urged to “retain ownership of the key risks”, which also includes relying on the suppliers to cost-effectively deliver the smart meter programme.
Since 2011, the net cost benefit of the rollout of the smart meter programme has fallen from £8.3 billion down to £6.2 billion, which is said to be as a result of the one year delay of the scheme.
These risks are stated to be of a low probability of occurring, but “high impact”.
Margaret Hodge, chair Public Accounts Committee, said: “Decc cannot afford to relax if it is to have smart meters in every home by 2020 and make sure it secures the expected £6.2 billion of benefits.
“Energy suppliers believe that not all customers will want a smart meter and there will be extra costs involved in persuading people to have them installed.
“Decc 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.”