The introduction of smart meters to the UK could lead to savings of £65 a year for the average household, according to a new report from British Gas (Staines, UK) and Oxford Economics.
According to the study, the rollout of smart meters across the UK will lead to savings of approximately £14 billion ($22.7 billion) between 2012 and 2030, equating to an average saving per household of about £65 a year.
The UK government has required all homes and businesses to have a smart meter installed by 2019. The report’s authors expect this to cost about £11.5 billion but say it will lead to savings of some £25.3 billion.
Those include £11.2 billion in consumer energy savings, £10.7 billion in efficiency savings and £3.2 billion in generation-related savings.
Smart meters should reduce energy consumption in homes and businesses and allow utility companies to operate more efficiently, while generation-related savings should result from carbon reductions in the traded and non-traded energy sectors.
“This report shows that there is a clear financial benefit to Britain in rolling out smart meters,” said Andrew Tessler, a senior economist at Oxford Economics. “Smart meters can also greatly reduce the time taken to switch suppliers and make switching more convenient for customers.”
Ann Robinson, the director of consumer policy at price-comparison service Uswitch, called the report a “first step in opening up the debate about smart meters”.
“It’s the first time that there has been any real analysis to demonstrate that smart metering will save householders money – consumers will be reassured that smart meters could help save £65 a year off the average household energy bill,” she said.
But she warned that “smart metering will fall flat on its face” in the UK unless utility companies and policymakers do a better job of educating consumers about it.
Robinson said that many of the benefits highlighted in the report relied on consumers changing their behavior. She also cited research carried out by Uswitch indicating that only 45% of consumers have heard of smart meters, while another 35% have no idea what the devices do.
“If consumers are to fully realize the cost savings, they can no longer be kept in the dark,” she said.
Smart meters are intended to put an end to estimated bills by sending precise meter readings to utility companies automatically. Through the use of portable energy displays, they should also allow customers to see exactly how much gas and electricity they are using in real time.