In 2022 the government introduced a new four-year regulatory framework with binding targets for suppliers, according to the National Audit Office1. The framework governs the smart meter rollout, which the government first set out in 2011 with a vision for every home and small business in Great Britain to have a smart meter and an intention to effectively complete the rollout in 20191.
That target has been adjusted on three occasions1. The NAO, in its report published on 14 June 2023, states that the government is consulting with suppliers and other industry stakeholders on its proposal for the regulatory framework for 2024 and 20251. The proposal includes a target for suppliers to install smart meters in at least 80% of the homes they supply with energy, and in 73% of small businesses, by the end of 20251.
"in 2022, the government introduced a new four-year regulatory framework with binding targets for suppliers"
The NAO describes smart meters as able to record half-hourly price and consumption data and to provide automatic meter readings to energy suppliers, and, when linked to in-home displays, as providing households with information on their energy usage and costs1. It says the government sees them as a critical feature of an efficient, decarbonised power system because they can encourage consumption patterns more aligned with a generation mix that increasingly draws on intermittent renewables such as wind and solar1.
The report also records disagreement over the causes of delay. It states that while the Department for Energy Security and Net Zero and suppliers collaborate in many areas, they disagree on the reasons for the delayed rollout, and that both sides need to work constructively together on its future, including considering the merits of new incentives and regulations that increase take-up1. The NAO concludes that the proposal under consultation to reach at least 80% household coverage by 2025 is well behind the original target to complete the rollout by 20191.
Why it matters for households
The framework sets supplier obligations rather than household ones, so its practical effect on a given home depends on whether that home has already been offered or fitted with a meter. The rules and supplier obligations sit behind the installation process, and the obligations and appointments side determines how a visit is arranged. For a household, the relevant question is usually what a meter does once fitted: half-hourly consumption and price data, automatic readings, and usage and cost information through an in-home display1. Those functions underpin time-of-use arrangements, which is why peak pricing depends on having a meter capable of recording consumption in half-hourly periods. The NAO notes that the installed base is beginning to demonstrate benefits, including potentially helping to achieve power sector decarbonisation1, but it also states that the department lacks robust information on the total costs and benefits of the programme1. For a household weighing up energy independence, that means the case for the technology rests on documented metering and display functions, while the wider cost and benefit picture has not been reported in full.
What happens next
The government is consulting with suppliers and other industry stakeholders on its proposal for the regulatory framework for 2024 and 2025, including the 80% household and 73% small business coverage targets by the end of 20251. The NAO recommends that the department ensure it has robust information on both the total costs and benefits of smart meters, particularly on the merits of different approaches to the rollout after 2025, including considering at what point the programme can end1. No date for the conclusion of that consultation is given in the report1.