New research has demonstrated that the changing energy market, which is becoming increasingly defined by new technologies, can lead to potential savings for UK households of more than £200 a year.
By embracing these new innovations – all of which are made possible by the digitisation of energy through our national smart metering system – consumers could slash 20 per cent off their annual bill, says the new report by Delta-ee.
Time-of-use tariffs, which reward customers for using energy at off-peak times, automatic supplier switching services, and the ability to sell excess energy generated from the home are just some of the smart innovations already available, or in the pipeline, for smart meter owners.
The possibilities for change that benefit the consumer, the grid, and the country are ever-growing, but at their very core depend on the rollout of smart meters.
Just as innovations in technology have changed the way the nation engages with day-to-day activities such as listening to music or watching TV (through smart applications like Spotify and Netflix), smart meters similarly hold the power to revolutionise energy use.
Indeed, the report from Delta-ee, the specialist energy research and consulting company, demonstrates how the changing energy market can lead to potential annual savings of over £200. It also found that annual household savings could include up to:
• £90 from time-of-use tariffs (£130 for electric vehicle users) – enabled by customers buying energy when it is cheapest.
• £100 from peer-to-peer (P2P) energy trading. In the future, customers will be able to buy and sell energy they generate and store with other customers on virtual platforms.
• £300 from auto switching. Smart meter information will allow companies to automatically work out the best tariffs for individual customers, and then automatically switch them.
• £75 from smart pre-payment meter tariffs. Pre-payment customers will no longer lose out and have access to the benefits of most other customers.
Dr Andrew Turton, Principal Analyst at Delta-ee commented: “Back when we all first started discussing smart meters it made sense to focus on immediate bill savings. But since then, so much has changed in our lives. People are now used to real-time services enabled by digitalisation rather than simply purchasing physical products.
“Just as the benefits of music services like Spotify are far greater than not having to buy CDs, smart meters are a fundamentally transformative technology and open up a whole host of new services to customers which can benefit their lives and reduce their costs. Without smart meters, customers will be locked out of this future - simply buying kWh of energy, often based on estimates, at a higher cost.”
Robert Cheesewright, Director of Corporate Affairs at Smart Energy GB added: “This report shows that smart meter users who are most engaged with their energy use could save up to 20 per cent on their annual energy consumption. That’s potentially hundreds of pounds of savings available to households who upgrade to a smart meter and become part of a cleaner, greener and smarter energy system.”
The report assesses the current annual savings by smart meter equipped homes, as well as looking at examples of innovative companies in the UK and abroad who are starting to offer new services to customers which are aimed at providing customers with the outcome they need, rather than only providing energy.
For example, ‘heat as a service’ offerings ensure customers’ homes are heated to their required temperatures at a lower cost, without the customer having to worry about owning, maintaining, and replacing their own heating systems. Or auto switching services, where customers never need to worry about being on the cheapest tariff because smart meter data is used to identify the best tariff for their specific needs.
Download the report here.
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