Not-so-smart meters

Smart metering is meant to mean more accurate billing, but there are some important implications that businesses need to know about.

  • Businesses face higher energy bills following smart meter installation
  • Compatibility issues mean businesses are being prevented from switching suppliers

Businesses are being urged to exercise caution when being offered free smart meter upgrades for their gas and electricity supplies.

The warning comes from Make It Cheaper, the saving experts for business*, which has seen a sharp rise in the number of switching attempts that fail because of non-compatibility issues with meters using smart technology. It has also seen some energy suppliers apply additional standing charges to support smart meter technology. These charges range from 20 pence to 60 pence per day (£73 to £219 per year). Even if a supplier accepts a new type of meter from a customer wishing to switch, it is often subsequently read in the traditional 'dumb' way and so removing any smart technology benefits.

Any non-domestic site that has had a new meter installed in the past two years is at risk from the compatibility (or 'interoperability') problem. These include small businesses, charities and smaller sites of larger businesses or public sector bodies. Whilst there are no official figures available for the adoption of smart meters, recent announcements from the 'Big 6' energy suppliers suggest at least 200,000 have already been installed among non-domestic sites. Eventually up to 2.2 million electricity and 1.5 million gas sites will be included in the smart meter rollout of the non-domestic sector.

According to Jonathan Elliott, managing director of Make It Cheaper: "There seems to be a lack of coordination with the rollout of smart meters and so all the suppliers are making different choices over which type to support. As a result, switching is being seriously thwarted when it could have been made so much easier. Until the industry can guarantee open standards that allow hassle-free switching and promote competition, it's a case of weighing-up the pros with the cons before accepting a smart meter."

Five tips to get the most out of a smart meter:

  1. Check it out. Find out from your supplier the details of what technology platform it uses and whether or not it is supported by other suppliers.
  2. Rental charges. Ask for the length of your installation contract and if you still have to pay a rental fee if you switch to a different supplier.
  3. Negotiate at renewal. If you can't switch supplier, you may be able to use this as a reason to negotiate down any future price rises.
  4. Use its features. Make sure you optimise its value in helping to understand your consumption and how you can go about reducing it to save energy and money.
  5. Billing accuracy. Relax in the knowledge that you will only pay for the energy you use and no longer be vulnerable to the financial hazards of estimated billing.

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About Make It Cheaper

Established in 2007, Make It Cheaper is the number one destination for businesses to get a better deal on their utilities and business services. Based in Central London, Make It Cheaper receives more enquiries and arranges more new contracts than any other business price comparison service. These include the business customers of most of the major domestic price comparison services with whom Make It Cheaper has partnerships, as well as business membership organisations, charities and trade associations. Acting on behalf of all these customers with total impartiality and free of charge, Make It Cheaper offers year-on-year savings across a range of products including business electricity, business gas, insurance and telecoms. Using its expertise and scale in the SME market, Make It Cheaper will typically save its customers over 30% of costs as well as a considerable amount of time that they can then spend on running their businesses.

Make It Cheaper was recently a finalist for 'SME of the Year' at the National Business Awards, 'Young Company of the Year' at the CBI's Growing Business Awards and 'B2B Customer Service Team' at the National Customer Service Awards.

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