Smart meters are the future of domestic energy management, with the UK government committing to roll them out into every UK household by 2020. Bill Bullen, managing director of smart metering energy provider Utilita Energy, believes the key to success is in educating people about the benefits gained from using a smart meter, a model which is already being led by the social housing sector.
People can be wary of a new technology, particularly when it is reinventing something such as the supply of energy which hasn’t really changed in years. Research carried out by uSwitch in 2013 found that 55 per cent of people were unaware of how smart meters worked and the benefits that come with the technology and as a result, there are a lot of misconceptions which must be addressed before householders can be fully engaged in welcoming the change.
Bring the family
Family workshops have been particularly effective in ensuring all generations understand the importance of energy efficiency and the steps everyone can take to help reduce consumption through changing behaviours. Children and adults alike are always surprised at the difference it makes by turning their gadgets off properly instead of leaving them on standby or how much energy it takes to boil a kettle – it may sound obvious but seeing their credit used in real time has a big impact!
In addition, it is also useful for energy providers to run regular surveys to understand the consumer’s attitude towards energy usage, which allows providers to be responsive to customer needs. One of our recent surveys found that 35 per cent of people are monitoring their energy usage more closely, a task which smart meters make easy and hassle-free.
Welfare reform
Welfare reform has had a big impact on the levels of stress tenants experience when it comes to dealing with their finances. A recent report from the Joseph Rowntree Foundation surveyed 16 housing providers to find out how the changes have affected tenants with worrying results. There is a general trend of incomes shrinking and costs rising, with food, energy and rent the most pressing points for those struggling to make ends meet. Food banks are now a vital lifeline for the poorest tenants as they increasingly have to make the choice between heating their homes and putting food on the table.
Using a pre-payment smart meter is one way to reduce the stress associated with energy costs as tenants always know exactly how much they are paying and no longer need to worry about receiving unexpected bills. Customers can use a pre-payment service to budget and stay on top of their monthly expenditure, with features including emergency and friendly credit ensuring energy doesn’t run out on a winter’s evening or on a Bank Holiday when payment points are closed. Mobile and online top-ups also ensure tenants are in control of their money and don’t have to visit payment points in person.
Smart meters have the capacity to provide breakdowns of how household energy is used, with costs displayed in real currency, meaning tenants can be more aware of their energy expenditure and adapt their behaviour to save money. They will also make it easier for tenants to switch suppliers to get the best deal, and according to government estimates, the average tenant will save £23 per year on their energy bills by 2020 as a result of the roll-out, dependent on households actively changing their energy usage habits.
There are a number of misconceptions around smart meters which must be understood and addressed before a full tenant engagement programme can achieve success. I’ve listed a few of the most common below:
Smart meters are undercover ‘spies’
With extensive media coverage of misused or lost public data, many people are wary of the information smart meters collect and how this might be used to ‘spy’ on them with negative effect. In fact, it is quite the opposite and the data collected from smart meters is invaluable in helping to shape the UK’s energy provision. It provides valuable insight into how and when we are consuming energy which allows energy providers to better tailor their offering and ultimately improve service for customers.
Pre-payment smart meters reduce the quality of customer service
Customers switching their energy supply to a pre-payment smart meter are often concerned that this might result in a lower level of customer service as contact with their energy provider becomes reduced. In contrast, the data collected from smart meters actually boosts service provision, allowing providers to help customers identify where they might be wasting energy, as well as recommending simple measures which can make a big difference to their consumption.
Pre-payment smart meters are only for those with poor credit
In the past, pre-payment energy meters were typically provided to those with poor credit or on a low income, but they are now in use by almost 16 per cent of the UK’s households who are reaping the rewards from taking control of their energy usage. Homes with a smart meter often use less energy because it very clearly shows their consumption and exactly how much this costs – for example, using a tumble dryer less can save a significant amount of money.
There will always be critics of new technology and initiatives, but the value of pre-payment smart meters in helping tenants budget, reduce their energy consumption and live more efficiently is one which cannot be argued with and which will continue to make a positive impact on the housing sector as a whole.
Bill Bullen is managing director of Utilita Energy.
