Energy firms pay out £11m after not fitting enough smart meters: Have customers had enough?

Six of the UK’s biggest energy firms will pay regulator Ofgem £10.8million after missing smart meter installation targets.

Ofgem today confirmed that energy suppliers British Gas, Ovo, Bulb, Eon, Scottish Power and SSE missed these targets by a collective 1.02million smart meters in 2022.

While the regulator has been tight-lipped on the reasons, experts believe consumer resistance to the meters is a big factor – along with technological hold-ups and a lack of staff. 

Smart meters are billed as helping consumers save money on energy bills and cut overall UK gas and electricity use. But the devices have met with resistance from many households, who have decided they do not want one.

Meter rule: The Government has set targets for how many smart meters it wants to see fitted to UK homes, but has had to keep pushing the deadline back

Early versions of smart meters were beset with problems and often did not work at all, with many consumers saying later versions were not much better.

Others do not like the idea that data is constantly being sent to their energy provider.  

The Government wants smart meters to be fitted to 80 per cent of homes by the end of 2025. 

But it has already pushed the deadline back four times, with the initial plan being to fit a smart meter to all homes by 2020.

Ofgem only began setting hard targets for smart meter installations in January 2022, meaning energy firms are already falling behind in the very first year of the campaign.

Earlier this year smart meters were even given a celebrity push by TV presenter and consumer champion Angellica Bell, who co-hosted an advert on how smart meters can help consumers check the energy their appliances use.

Saved by the Bell: TV presenter Angellica Bell investigated which household appliances are the most energy efficient in an August advert

Firms are given installation targets depending on their size.

For example, in 2022 British Gas had a target of fitting 659,699 gas smart meters in customers’ homes, but only fitted 344,817 – or 52 per cent.

For electric smart meters, British Gas installed 356,091, 87 per cent of the way to its target of 404,943 in 2022.

The six energy firms will pay the £10.8million into Ofgem’s Energy Industry Voluntary Redress Fund. 

British Gas will pay £3.37million into the fund, Ovo £2.39million, Bulb £1.83million, Eon £1.72million, Scottish Power £1.24million and SSE £252,000.

This fund is mostly used to help consumers in vulnerable situations that are most at risk from cold homes and high energy bills.

All energy firms have to publish their smart meter installation targets and how many they have successfully fitted.

However, 40 energy firms did meet their smart meter installation targets for 2022.

Because these six suppliers are paying the £10.8million, Ofgem is dropping an investigation into why they missed their smart meter targets.

Why are energy firms missing their targets?

An Ofgem spokesperson would not say why energy firms are falling behind their installation targets.

However, an expert said this was down to consumers not wanting the meters, a lack of skilled installers and issues with the communication network needed to run the meters.

Tom Goswell, head of consumer markets at energy analysts Cornwall Insight, said: ‘The challenges in meeting smart meter targets are complex. 

‘While resistance from some households to smart meter installations is a factor, other issues such as supplier struggles in recruiting and retaining smart meter engineers and technological limitations, such as the wider smart meter communications network coverage not being sufficient or difficulty placing meters in high-rise buildings, have all played a role in the slower rollout of smart meters.’

There are now more than 33million smart and advanced meters fitted to homes and small businesses of the UK, making up 58 per cent of all meters. 

This post first appeared on Dailymail.co.uk