Maximising the benefits of smart metering for consumers

Smart meters are replacing traditional gas and electricity meters as part of a national infrastructure upgrade that will make the UK energy system more efficient and flexible, enabling the country to use more renewable energy and achieve net zero greenhouse gas emissions by 2050. 

NatCen was commissioned by the Department for Energy Security and Net Zero (formerly the Department for Business, Energy and Industrial Strategy) to carry out research to better understand the full range of benefits experienced by consumers who might experience barriers to realising benefits from smart metering (referred to as vulnerable consumers) and help ensure these benefits can be maximised for a wide range of consumers.

Methodology

The study consisted of 80 in-depth interviews with consumers who were experiencing one or more of the following barriers: (1) were experiencing financial barriers to paying for energy; (2) had health conditions or disabilities that affect energy need; (3) lacked control or agency over energy use and costs; and (4) had comprehension or engagement barriers.

Four deliberative workshops were then conducted to test broad policy ideas drawn up by BEIS in response to some of the opportunities for further realising the benefits of smart metering identified in the interviews.

Key insights

Five key groups of smart meter benefits were reported, reflecting varying levels of use and engagement with smart meters. A change in behaviour also played a role here: while simply having a smart meter brought ‘passive benefits’; a greater degree of behaviour change in response to the smart meter led to ‘active benefits’. This behaviour change ranged from consumers simply reading the In-Home Display (IHD) to acting on the information it provided.

Key passive benefits

• Convenience – for credit consumers, this meant no longer needing to provide meter readings, which was particularly important to those with health and mobility issues. For prepayment consumers, smart meters offered the convenience to top-up remotely.
• Peace of mind – this came from accurate and predictable bills for credit consumers, helping those on low income feel less anxious about getting into debt because of high bill estimates. For prepayment consumers, smart meters offered the peace of mind of not running out of credit at inconvenient times because they knew they could top up quickly online or via their energy supplier’s app. This was particularly reassuring at the height of social distancing measures during the coronavirus (COVID-19) pandemic.

Key active benefits

• Better awareness of energy use and costs – through the IHD, helping consumers feel more informed about their energy use and costs.
• Better control of energy use and costs – for participants who acted on the information provided by their IHD to better manage their energy use behaviours.  For example, using less energy by turning off and unplugging appliances. These behaviour changes were often driven by specific vulnerabilities, such as financial difficulties and living in cold homes that participants said they struggled to keep warm due to draughts or ineffective heating systems.
• A final benefit of smart metering was feeling able to contribute to environmental goals by enabling energy conservation.

Key enablers to realising active benefits were having a smart meter operating in smart mode and an IHD, receiving an explanation of how to use the IHD or any associated smartphone app and having digital access in order to use online top-up options. Participants also needed to be motivated to change their energy use behaviours and have the capability to do so. This included understanding smart meter features and what they offer, as well as a basic level of digital literacy or confidence to engage in and act on the information provided.

The benefits of smart metering outweighed the detriments for participants; detriments were also usually experienced alongside the benefits. Detriments included heightened anxiety due to greater awareness of energy costs, friction in the household due to disagreements over energy usage, frustration with faults, and a shift towards mistrust in smart metering driven by perceived discrepancies between usage and cost.