As of a month ago, only 300 of the 20,000 of second-generation meters installed were located in north England or Scotland.
On average, customers with smart-meters were reducing their energy demand by about 3% by raising awareness of our energy use.
While obviously valuable, it doesn’t truly justify the cost and effort of rolling out smart meters which is estimated to be around £11bn. Particularly as you can reduce your bills by more than 3% by using LED lighting or draught-proofing.
The biggest revolution of smart meters is how they can facilitate in how the domestic sector manages and pays for energy. This is what consumers need to know, engage with and shout about.
At present, most domestic bills pay a flat rate for energy, regardless if it is 3am on a weekend in July or 6pm on a Monday in January. This is a market failure, as your energy supplier will be paying a very different price for that energy. Smart meters change this. They allow the consumer to be charged different amounts at different times, incentivising households to switch times of high energy use, to times of low cost and thus saving money. This highlights the point of when you use energy to become increasingly as important as how much.
Examples of this are beginning to be seen but they will be ubiquitous soon. The newly launched Octopus Agile tariff allows people with smart meters to be charged different hourly amounts over the course of the year. On average, the tariff is similar to standard rates available but varies over time of day and season. In some, rare cases, the price is actually negative where you would get paid to take the energy, getting as high as 35 p per kWh which is about 2.5 times the standard rate. If you can switch your energy use around, (probably automatically) then you could save a lot of money, help the grid to balance and use more renewable energy.
In order to protect the vulnerable and enable us all to benefit from this revolution, there is the need for regulation. The result? Lower bills for the consumer, reduced CO2 emissions and air pollution and a more efficiently used grid. As our hot water tanks, electric vehicles and even our washing machines become participants in the route to market perfection, we can make the UK more productive and enable the all-electric future. It is going to be a win-win.