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How Will Smart Meters Cut Energy Bills?

By Edited May 13, 2015 1 2

Energy suppliers need to find a massive 11.7 billion to foot the bill required to meet their target of smart meters installed into 26 million homes by 2019. When our ever escalating bills drop through our letter boxes  it is not hard to see it is ultimately Jo Public who is expected to fund the project. 

While the general public has played no part in the decision for such large scale spending, there is a need for assurance we will eventually see some benefit to our own pockets. So how is this expensive investment going to cut the average householders energy bills?

Knowledge is Power

Smart meters are far more than simply an automated alternative to how we read our meters currently.  Available for gas, electric and water supplies, they will transform the day to day running of energy companies.  These changes will enable to them to become far more efficient and cost effective. Meters can be programmed to highlight and transmit any number of intelligent data records allowing energy companies to interrogate them in whichever way they need.

Variable Rate Pricing

Most use to them will be the facility to see exactly how much energy is being used and when. Data can be collected as often as hourly from each home and transmitted daily to the grid. Companies have this data for the population as a whole, with smart meters they can see who contributes to the peak demand and charge them more to offset the cost of generating that peak demand amount of electricity.

Better Problem Detection

Procurement of gas will be far more efficient as providers are able to see exactly how much they will need and when.  Electricity generation can be far more effectively controlled. More importantly surges will be alleviated as companies are able to meet customer demands easily and without surprises.  Repairing and fixing problems carry unforeseen costs, and with these usually come overtime premiums! As in any business, the less time anticipating problems reduces problem-related costs.

Reducing Labour Costs

Smart meters will also reduce the need for costly man-power. The integral software of Smart Meters means they can be updated, altered and in many cases repaired without the need for an engineer to visit the customer’s home.  Its primary function on behalf of the householder is to transmit regular and accurate readings to the supplier.

Currently energy providers have an obligation to make physical readings from household meters a minimum of once a year. A meter reader will however visit homes as often as quarterly to try to obtain readings.  Even if the front door remains closed to him the meter reader racks up massive costs on his daily rounds.  His salary, the price of the van, uniform, road tax, insurance and of course fuel all have to be funded.  At source this is paid by his employer but ultimately the costs are paid for through the householder’s bill. Alleviating these expenses, suddenly that smart meter seems a good deal more attractive, unless you are the unemployed meter reader.

No More Estimated Bills

Smart meters also mean an end to estimated bills and the problems they cause. Estimated electricity and gas meter readings are notoriously inaccurate based on a customer’s usage in the same quarter the previous year. They are recognised by all parties as less than ideal and make up a large part of the billing enquiries handled by customer services each day. Smart meters will transmit accurate readings to the supplier leaving no room for error. With the introduction of a more reliable method of monitoring, call centre and administration costs are reduced too.

 

Short term there is clearly an expense to smart meters but long term the benefits not only to supply companies but also the general public are incredible. The reduction in time and money spent sorting out problems will be slashed, and that has to be worth a pretty penny of anyone's money.

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Comments

Nov 23, 2012 1:05am
eileen
Your smart meters must be different to ours in Western Australia. We paid $300 plus to have one installed when we were both working. Simply because peak hour use was expensive but before 7 am or after 9pm was cheap which suited our lifestyle because we worked and did washing etc after 9pm

They kept putting prices up up and up until we were paying 43cents per unit in peak and about 28c in off peak. Others without smart meters were then being charged 17c now its 19cent.
Luckily for us we sold our house and moved. Now on 19c unit but we had solar installed and now we get a cheque from them because we do not use that much. As often away traveling. Will draw the cheque before we go away next time towards our fuel. Good article on smart meters.
Nov 23, 2012 3:07am
Philtrate
Thanks for all that info Eileen, In Ireland we will have to pay for them, I think it's 100 euro, I think they are "free" in UK, just added gradually to power bills. Solar would be nice but the payback period and feed in rate are crazy here, like 10K euro installation, to save 250 a year and the feed in rate only about one third of the standard unit rate.
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