Smart meters are getting smarter, but what does that mean for consumers?

Article published 6 September 2023

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Smart electricity meters getting smarter, but what does that mean for consumers?

What are smart meters?

SMART meters are digital devices that measure electricity use. This technology has been in use in Australia for close to two decades, and there are plans to fully transition by 2023.

In the time since they were first introduced, smart meters have changed significantly. Older ‘basic’ digital models were not all that different from the old Bakelite boxes with metal discs or dials. The newer ‘advanced’ units can do a lot more.

Experts say that they can be used to cut power consumption, allowing households to save on power bills as well as reducing pressure on the network during peak periods.

Reducing energy use has become a priority amidst ongoing concerns about environmental sustainability, energy shortages, changing weather conditions and rising costs for consumers.

Most properties still have the old units. Others might not know what’s ticking away down the side of the house when the kettle goes on. Most people don’t care, as long as it doesn’t cost them more.

For users in embedded networks, who typically have far less consumer protections than mainstream customers, it may not be possible to install a smart meter at all.

Is this a good thing or a bad thing? Well, that’s a difficult question.

What’s so smart about them?

Newer smart meters can record how and when electricity is being used. This information is sent automatically to energy retailers at 5- or 30-minute intervals. This cuts out the need to complete manual meter reads.

Depending on the layout of your home, this might be a huge relief – especially if your meter is difficult to access. Say goodbye to estimated bills.

Smart meters are used in homes with solar panels to measure how much energy is being generated beyond what the household is using. This electricity can then be sent back to the grid or stored in a battery for later use. Many providers pay a ‘feed-in tariff’ for solar energy that is sent back, though rates vary and are inevitably far below the retail price.

Smart meters also allow utility companies to track usage in peak and off-peak periods, meaning they can charge different rates accordingly. This can be beneficial for households who mostly use energy at times when less people are drawing power from the grid, or who are willing and able to adjust how and when they are using appliances to save money.

Some providers also allow you to monitor your usage in real-time, meaning that you can be more aware of what appliances are costing you the most money.

What are the issues for consumers?

In most parts of Australia, all new and replacement electricity meters must be ‘smart’. In Victoria, smart meters have been compulsory since 2006. Most providers will cover this cost where a new meter is required, but it is important to be sure that you are aware of any associated costs before installation.

Some premises may not be suitable for a simple meter exchange, and extra electrical work may be required. In this case, the owner of the property is slugged with the extra costs.

The Energy and Water Ombudsman of NSW, along with their equivalents in other states, are concerned about a lack of transparency with consumers. Providers are not currently giving their customers enough information on how smart meters work, how to use them to cut down bills, and how billing might change after installation.

When it comes to billing, you can stay on a flat rate and there will be no changes to how you are charged for energy, though not all providers will offer this to customers who have smart meters installed. You may be automatically swapped to time-of-use rates if that is the case. This might be of benefit if you are willing to change how you use electricity, or already use most of your energy in off-peak periods. Be sure to ask questions and shop around for the deal that best suits you.

Another key issue for many consumers is privacy. What data is being collected, and who has access to it? Do smart meters allow too much access into our homes? Whilst there is legislation and other safeguards protecting your energy data, many may feel that this isn’t enough to address their concerns.

If you live in an embedded network, you might be aware that there are currently less rules around what type of meters need to be used to measure energy or water usage – the minimum standard is lower, which can make it difficult and expensive to swap to a mainstream provider as they may charge customers for meter upgrades and other electrical work. This also means that there is no motivation for existing embedded networks to upgrade to smart meters for those who would prefer them.

Can you opt out?

Currently, you do not need to agree to having a smart meter if your existing meter is still working. There are some measures in place to allow consumers to request a non-communicating smart meter – although, as always, there are likely to be costs associated with this.

If you use a combination of solar and grid energy, you must have a smart meter. If you move to a home with a smart meter, you cannot swap it for an analogue meter. If you want a meter with communications disabled, known as a type 4A meter, it may be expensive to install and maintain and not all providers will accommodate. You will likely be charged for meter reads on an ongoing basis.

For some, smart meters might be a useful tool, and others may not notice any difference. For a few of us, the change might be frustrating. Consumer advocates are watching closely, and local Energy and Water Ombudsmen are preparing themselves for a rise in complaints as the roll-out gains momentum.

Related articles:

Utility Costs in Embedded Networks Under Review

Energy Bill Relief for Embedded Network Users

Energy Bill Cuts for Retirement Villages, Manufactured Home Parks: Embedded Networks

 

Did you know that the NSW Government has a scheme that allows homeowners or social housing tenants that are eligible to receive a Low Income Household Rebate to exchange this for a free 3 kilowatt solar system instead? There are similar programs operating in other states, as well as a Federal scheme offering financial incentives for individuals and businesses.

Check here for more information on energy rebates in NSW, or here if you are elsewhere in Australia.

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