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Smart meter benefits: the enabling properties of smart meters to transform customer relationships


The smart meter rollout in GB has been besieged with problems, so the smart meter consultation currently underway in GB is necessary. However, completing a market-wide rollout programme is just one area to address. Stimulating innovation to unlock the longer-term benefits that smart meters undoubtedly enable and communicating these benefits and the transformational potential for customer relationships is also key to a successful future energy eco-system. 

A fresh injection to the GB smart meter rollout  

The GB smart meter rollout continues its slow progress, with latest figures of 27% of residential meters now operating as smart meters. Forecasts in Spring 2019 of 30m smart meters to be installed by the end of 2020 – or 55% of the 53 million meters in GB homes and businesses – seem some way off when only half this number (14.9m) of smart and advanced meters were operational to the end of June 2019. On top of this, those with smart meters now will have been the easiest to persuade to sign-up and further recruitment may be increasingly difficult. 

The UK Government recently issued a consultation on smart meter installation post 2020, when the current rollout mandate ends. Whilst it’s business as usual for the GB energy suppliers tasked with taking ‘all reasonable steps’ to install smart meters to existing customers up to the end of 2020, this post 2020 consultation is necessary to keep ambitions of a market wide rollout alive. 

In the consultation document, the Department for Business, Energy and Industrial Strategy clearly state the importance of smart meters as ‘building blocks of a more flexible and resilient energy system fit for the 21st century.’ Whilst this message may resonate in industry circles, the benefits of smart meters have been underplayed amongst consumers, a critical factor in securing smart meter adoption in the country’s opt-in approach. Rather than just a mechanism to record energy consumption accurately and relay meter reads automatically which is the general consumer view, smart meters offer a new way of engaging, empowering and even collaborating with customers. 

Smart meter data is a foundation of the energy transition across Europe 

The focus of consumer communication through Smart Energy GB has been on the immediate pain point of estimated energy bills, which have damaged suppliers’ relationships with their customers through lack of transparency, bill shock and customer distrust. So, as a starting point, it makes complete sense to start here. Innovation in the market has also grouped around these themes with energy insights through apps and online portals used by millions of consumers in the UK and over 20 million in Europe to help them understand their energy usage and spend.  

But customer engagement (using its natural definition of active participation rather than supplier switching) is only the start of the story. 

Energy consumers don’t just want to understand their bills and be informed about their energy consumption. They want to be empowered to make good energy decisions effortlessly. Taking a wider European lens, there is plenty of innovation in this space around high bill alerts (Engie, Fortum), identifying sources of energy waste (Eneco), and budget/energy coaches (Essent, Vattenfall). Linking smart meter data to other data and services can take this a step further with automatic switching services (Labrador) and smart thermostat comfort/budget settings (Sowee) as examples. 

Innovation is also moving beyond customer empowerment and smart meters play an important enabling role to transform customer relationships through customer collaboration. Shifting consumer behaviour from energy consumption to the timing of that consumption to reduce energy bills, ease network pressure and reduce carbon emissions through time-of-use tariffs is one such use case (Tomorrow and Barry, True Energy). Incorporating new energy assets such as electric vehicle charging, solar PV panels and energy storage into smart meter-based propositions bring residential consumers on the new energy future of self-generation and optimised consumption (Jedlix, Lancey). The final theme in this customer collaboration is creating and sustaining new energy communities through smart meter enabled solutions to track and trade energy (Powerpeers, Sonnen). 

Through our work with energy retailers, distribution network companies, business model innovators and others, we have seen how the smart meter is an enabling technology to an energy system in transition. We can help market players keep abreast of market developments, company strategies and customer propositions, and understand the opportunities that smart meter data can bring. 

Smart meters need a compelling narrative as an enabler to compelling customer proposition 

Smart meters haven’t had the best consumer reception in countries like the UK and France. Communication has focussed on the immediate term around addressing customer pain points such as inaccurate bills. But this misses the compelling customer propositions of the future which show the path to a transformation in the customer relationship. Smart meter data is a key building block to this, so the UK Government announcement, while welcome from a logistical perspective is only part of the solution. A change in the smart meter narrative is desperately needed. Further delays and perceived problems with the GB smart meter rollout risks further undermining customer trust in the long-term and pushes back the time when everyone can benefit from smart meter data. And as we know, time is precious in meeting carbon reduction targets. 

For further information on our work for Smart Energy GB, you can download the reports on the role of smart meters in climate change mitigation and smart meter benefits. We will be issuing further research on smart meter data to transform customer relationships through our Digital Customer Engagement service soon or please contact David Trevithick, Principal Analyst at Delta-EE.  



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Sunday, 31 May 2020

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