Sustainability and low energy solutions provider, Inteb, has issued a six-month warning to businesses still currently operating with traditional rather than smart meters.
By April 2014, all Profile Class 05-08 electricity meters and all gas meters that annually use over 732,000 kWh must be replaced by a smart meter (AMR). Around 170,000 electricity meters and 40,000 gas meters will be affected by this UK legislation.
Inteb, which handles national and regional projects, is urging businesses to take steps now to get smart meters in place rather than leaving it to the last minute. Making informed choices now not only avoids a last minute panic, but potentially also avoids businesses encountering some of the pitfalls attached to smart meters, particularly those offered for ‘free’. These could include paying four times as much for a smart meter solution, by not knowing which offers to take up and which to refuse.
Some energy suppliers offer meters for no charge and the advantage of this is that businesses have simple contractual administration and can absorb the cost of the meter within their general supply contract. On small single sites, this can be advantageous.
However, Inteb says businesses must remember there is no such thing as a free smart meter and there could be longer-term implications. Energy suppliers have to pay a metering company for the meter and recover the cost from the customer via the standing charge or unit rates. In reality, the customer may end up paying more than double the equivalent ‘purchase’ cost that the supplier pays.
Additionally, the customer may become locked into a contract with their energy supplier if they accept a free smart meter. The asset is owned by the supplier in this scenario and this could lead to problems if they wish to change supplier. Some energy companies may not take on other suppliers’ AMRs and there could be service issues. Some suppliers will not quote for new supply contracts if they have to take on existing smart meter liabilities. This reduces a business’s options within the energy supply market.
Some suppliers will also mark up the cost of providing data, not only passing on the charges that they incur from the meter operator, but also sometimes doubling them.
Other disadvantages are that the customer does not qualify for Enhanced Capital Allowances if their supplier owns the meter and any problems that they have need to be resolved by firstly the supplier and then the metering company, which can lead to delays in getting resolutions.
It is also more complicated to accept a supplier’s smart meter offer where there is a multi-site operation involved and where supply contracts may be in place with multiple suppliers at different sites operated by an individual company.
Inteb says many companies fail to realise that there is a direct solution, which can overcome some of these issues. The direct solution offers the advantage of the customer owning the meter and the data. They can take a supply from any supplier they choose, having no tie-ins and can use the metering company’s software reporting tools.
Where a company owns its meters, it can decommission them at sites that close and reinstall them at new locations. The business owner can also claim under the Enhanced Capital Allowance Scheme, to help cover the cost. Any problems are resolved directly with the metering company. Variable payment options can be accessed, from outright purchase to rental, so this can help soften the blow of the upfront Capex costs. It is also easier to project manage rollouts where multiple supply contracts with different suppliers are in place.
Inteb’s consulting services manager, Tom Kelly, said: “We regularly see companies paying four times as much for their smart meter solution because they accepted a ‘free’ meter rather than paying an upfront cost of around £300 for the meter and then using our data services. Some businesses may struggle to pay the upfront cost, but they need to consider how much more they will pay over the lifetime of what could be a very long contract with the supplier of their ‘free’ smart meter.”