Martin Lewis: UK’s smart-meter targets are leaving energy consumers shortchanged.

According to consumer advocate Martin Lewis, the government’s “perverse” targets for installing electronic smart meters at homes in the UK are causing energy customers to be shortchanged.

Lewis, the founder and chair of MoneySavingExpert.com (MSE), has written to Ed Miliband, the secretary of state for energy security and net zero, warning that installations are being prioritised over repairs, leaving thousands of households facing shock bills because their meters have malfunctioned.

Grayson Perry, an artist from London, reported in December that the monthly electricity bill for his studio had increased from £300 to £39,000 due to a smart meter malfunction. Lewis wants to incentivise suppliers to fix faulty smart meters, as well as install new ones.

Lewis wrote in his letter: “I am writing […], to warn you of the potential brand damage which could make the government’s target framework perverse.” “A rethinking is required – I would suggest that firms shift their targets from smart meter installation to the total number of smart meters which are ‘working.’ This would encourage firms to perform both installations and repair.”

Smart meters are able to record and display energy costs in real-time, as well as send regular readings back to energy companies. By the end of the year 2025, the government expects that smart meters will be installed in 74.5 percent of homes. The estimated cost of £13.5 billion is funded by energy suppliers and recovered by consumers.

The rollout originally planned to be completed by 2019 has encountered problems. According to the Department for Energy Security and Net Zero, (DESNZ), figures released earlier this year, nearly 4 million smart meters in the UK are malfunctioning, causing some households to face life-changing bills.

Lewis stated that the DESNZ numbers did not accurately reflect the extent of the issue. The government estimates that 10% of domestic smart meters do not work. This is a narrow definition, he said. “Smart meters that do not send automatic readings to their supplier are included.”

“Our latest MSE survey… shows that 19% of respondents say theirs doesn’t work. This is because it includes in-home displays which won’t connect or communicate, inaccurate data on tariffs and usage, as well as prepay top-ups which don’t register. Repairs are often slow or not done at all as the resources are devoted to installing new equipment. This leaves consumers frustrated, and they are at risk of being misbilled and having further problems.

Customers had to pay for any repairs that were needed after the warranty period expired. Ofgem announced a new program in February that required participating suppliers to repair them free of charge. However, not all companies have signed up.

In a report from the House of Commons Public Accounts Committee, it was found that suppliers prioritized new installations in order to reach rollout targets. The current rules require firms to “take all reasonable steps” in order to replace or repair faulty meters. However, there are also binding targets and penalties for companies who fail to meet these targets.

Lewis stated that poor planning undermined a crucial strategy to achieve net zero. He said that smart meters that are implemented correctly could offer a bright future for energy security, and innovative tariffs to reduce peak usage by encouraging people to use renewable energy sources at times of low demand. It’s a shame that the history of smart meters is one of laziness, bad decisions, poor technology, and excessive costs.

We contacted the DESNZ for a comment.