Smart meters for prepayment customers lagging in Britain

The smart meter rollout for traditional prepayment customers is progressing more slowly than for standard credit customers, Ofgem believes.

In an open letter to the electricity suppliers, the regulator says a marked improvement in the delivery of smart meters to these customers is expected and supplier performance will be monitored going forward with concerns possibly subject to further action.

Also included are customers with radio teleswitch (RTS) meters that operate via long-wave radio technology and support versions of multi-rate or other complex meter types with certain functions such as switching between peak and off-peak rates or turning on heating or hot water.

“It is our view that smart meter installations for these customers have progressed more slowly than for standard credit customers, resulting in a lower overall coverage ratio of smart meters for both these groups,” writes Melissa Giordano, Ofgem’s Deputy Director Retail Systems and Processes, in the letter.

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“We are concerned about the slower progress in these areas as it represents a substantial risk to vulnerable consumers with these meter types.”

The letter notes that while the percentage of premises with a smart meter in Great Britain is approximately 60%, this is not the case for prepayment premises. There is a large variance between the larger suppliers’ smart prepayment meter customer portfolios.

In addition, in 2022 most large suppliers did not achieve their own forecast prepayment installations and a similar outcome is anticipated for 2023.

The letter expresses concern about the lack of early detection of self-disconnection, especially for vulnerable customers and also that they are unable to gain the benefits of smart meters such as more top-up options and real-time consumption data as long as they remain with traditional prepayment meters.

Approximately 900,000 homes are reliant on RTS meters in Britain, many of them in central and northern Scotland as well as some areas of England and Wales, with many still to be replaced.

Some suppliers have replaced over 75% of their RTS portfolio, whilst others have replaced less than 10%.

While the technology that supports these meters was due to be closed down on 31 March 2024, active discussions are under way in the industry to extend it to mid-2025. Ofgem expects that all RTS meters should be replaced at least 3-4 months in advance of that date.

Similarly to prepayment customers will be able to access the additional benefits that smart meters bring including in their case access to smarter tariffs.

The letter concludes highlighting that supporting and protecting vulnerable customers is a “key priority” for Ofgem.

“We will be monitoring supplier performance in these areas going forward and we expect to see a marked improvement in delivery of smart meters in both these categories.”