The state-backed installation of smart meters will save customers only 2% on the average annual energy bill, valued at £1328, until 2020 with savings expected to rise to 3% by 2030.
Costing roughly £11bn to the taxpayer, the smart gas & electricity metersí installation alone is likely to set all households across the UK back by £215, as they somewhat paradoxically pay for their metersí fitting through their energy bill. When running costs are factored in, households are subjected to an annual peak of £11 over the next 15 years, according to the Commonsí public accounts select committee.
Smart meters were conceived as part of measures to tackle the perceived inequalities within the energy sector whilst shaving some cash off a customersí bill. They were aimed at providing consumers with enhanced convenience to give them more control over the amount of energy being used, and inspiring customers to switch easily and more readily with a view to ultimately increasing competition within the energy industry.
Margaret Hodge, head of the commons select committee on public accounts, mused over the issue of competition within the energy industry, implicitly pointing toward the positive impact smart meters could have.
She said: "The department is depending heavily on assumed competition in the energy industry to control costs and deliver benefits. Relying on market forces to keep costs down may not be enough on its own to protect consumers.
However, recent figures from independent research group, Cornwall Energy, showed that the ëbig sixí energy suppliers have lost around 7.5% of the market over the last five years, reflecting an increased willingness on the part of consumers to shop around. Moreover, measures recently taken by npower reflect a more consumer-orientated focus on the part of top energy suppliers, with many disenchanted customers softening to the energy giants
Are Smartmeters a gimmick?
Though not expected to catalyse great waves in regard to energy savings, that the governmentís latest reform could see consumers even more out of pocket has sparked concern amongst the public. Despite being implemented to combat rising energy bills, smart meters are being viewed by some as a gimmick which lacks any meaningful ramifications for consumers.
Moreover, the governmentís unyielding standpoint on green taxes has not aided their attempts at cornering consumer confidence ñ rather, customers are openly showing their frustration at not being afforded the consideration they feel they warrant.
Jonathan Isaby, chief executive of the TaxPayers' Alliance, said: "This is the latest in a long line of headline-grabbing initiatives that risk pushing up the cost of energy to hard-pressed consumers. Ultimately, the only way that energy bills can be brought down in the long-term is for the government to do away with green taxes and subsidies, which increase the burden on families struggling with the cost of living."
Due to the greater degree of autonomy being bestowed upon customers, the government has conceded that any savings made are reliant on consumer responsibility through attentive observance of the meter. As such, households will have to reshape their routines in lieu of their smart meter if they are interested in saving cash on energy bills, which can be viewed as detrimental to oneís convenience ñ ironic given the focus of smart meters.
Margaret Hodge, talked of consumers being forced to become more ësavvyí in order for smart meters to work; yet appeared sceptical about any obligation imposed on them to do so.
Ms Hodge declared: The costs of installing 53 million smart meters will be borne by consumers through their energy bills. It will cost around £215 per home or small business over the next 15 years to install the meters ó an additional cost people can ill afford.
"Despite consumers footing the bill, they can on average make a saving of only 2% on the average annual bill of £1,328 until 2020. Even this is conditional on consumers changing their behaviour and cutting their energy use.î
An interesting proposal, one which would further aid the top energy suppliers in their bid to enhance their image, would be to re-distribute savings made from the redundancy of meter-reading employees amongst consumers.
The government appeared resolute on their aims for smart meters, insisting that the far-reaching effects of greater autonomy will empower the public, reduce bills and simplify the switching process.
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