The independent organisation charged with educating the nation about the smart meter roll out due to be completed by 2020 has warned energy suppliers that they risk going out of business if they continue installing the meters at the current pace, which is understood to be too slow to meet its target.
While most energy suppliers, especially the Big Six, have publically supported the government’s plan to provide smart meter technology to every household and business in the UK within the next two and a half years, many have implemented a very slow process to achieve the switch. The scheme will cost £11 billion in total, and it is believed the go-slow tactics employed by some energy suppliers are due to the significant cost of providing smart meters to all their customers.
Stubborn Energy Firms Could be Gone in ‘Less Than Five Years’
A big part of the problem energy suppliers who do not tow the line will face is that smart meters will soon make it easier for new energy suppliers to emerge and start taking larger and larger shares of the market. Smaller suppliers will also benefit from the more accurate energy-consumption reading technology as consumers are afforded more and more choice as to who supplies them with their energy.
The Chief Executive of Smart Energy GB, Sacha Deshmukh, revealed the stark future awaiting energy suppliers who kick back against the smart meter roll out, saying, “Some legacy companies, of the old large six, have really embraced the fact that the only choice they have for the long term is to embrace this [smart meter roll out]. You can either embrace this or fight it and find your business will be gone in less than five years.”
It is also possible that large media companies such as Sky and supermarket giants like Tesco will start offering energy options as part of their products and services, further diminishing the Big Six’s share of the market.
How Smart Meters Work
The technology at the heart of the smart meter roll out is an electronic device that monitors and records the exact amount of electric energy consumed by a customer over the course of a day or an hour, or even more frequently. That information is communicated immediately to the supplier who can then bill the customer for the exact amount of energy consumed, rather than rounding up or overcharging until a (hopefully) more accurate read-out can be acquired later on.
Communication between the smart meter and the supplier can happen either via fixed wire connections or via wireless means such as Wi-Fi.
Current State of the Smart Meter Roll Out
According to the government’s smart meter statistics, there has been more than eight million smart meters fitted into homes and business premises all over the UK so far already, with approximately 400,000 more being added every month.
Calculations by the consumer group Which? estimated that to meet the government’s target, the engineers installing the devices will need to install 24 smart meters a day, 24 hours a day, every day up to the end of 2020.
If you want to learn more about which energy suppliers are embracing smart meter technology and which available tariffs are most beneficial for your business, get in touch with Business Save’s team of highly experienced energy experts.