The smart energy transition is a shift in the national pattern of electricity use, so that we use most at the times when cheaper, greener renewable electricity is being generated. Smart technology makes this possible by allowing devices like heat pumps, electric vehicles and night storage heaters to be turned on remotely when the electricity is cheap.

A successful smart energy transition will lower energy bills, reduce fuel poverty and cut carbon.

To happen, it requires widespread public engagement, including from people on low incomes or in otherwise vulnerable circumstances. But there are barriers that prevent people from engaging with it.

Pulling down these barriers is critical. Without intervention, the smart energy transition risks deepening inequality—benefiting wealthier households while leaving others behind. Charging an electric car costs less per unit of power than running a night storage heater, for example.

Over the past three years CSE has given in-depth smart energy advice to thousands of people in vulnerable circumstances in work funded by National Grid. We’ve taken the insight from that work and used it to put forward six recommendations on how to share the benefits of the smart energy transition more fairly.

1. Improve the smart meter rollout
2. Make smart tariffs should be as inclusive and accessible as possible
3. Create long-term funding for local energy advice organisations
4. Develop training, resources and ongoing support for smart energy advisors
5. Set up a national smart energy advice network
6. Changes to energy efficiency grant schemes  

1. Improve the smart meter rollout

Fix broken meters promptly

The smart energy transition needs most people to have a smart meter and for those smart meters to work. At present, about 36m homes in GB have a smart meter (66%), but of these around 4m don’t work.

Our advisors find that suppliers are reluctant to resolve smart meter issues that can’t be fixed remotely. We often have to resort to raising customer’s issues with the energy ombudsman to get them fixed. Currently there are no Ofgem incentives to encourage suppliers to fix smart meters promptly.

Widen the Guaranteed Standards of Performance

CSE supports Ofgem’s proposal to extend the list of scenarios in which customers are eligible for compensation (under the Guaranteed Standards of Performance) to include:

• A customer requests a smart meter, and it is not installed within six weeks.
• If a smart meter is installed but doesn’t work (and the issue is within the supplier’s control).
• A customer raises an issue about their smart meter and the supplier doesn’t complete an initial assessment, take appropriate action and update the consumer within five days.
• A smart meter is not operating in smart mode for over 90 days due to an issue that is within the energy supplier’s control to resolve.

We agree with Ofgem that compensation is an “important tool for strengthening consumer confidence in the energy market”. And also that it “plays a key role in driving better outcomes for consumers” by suppliers.

CSE also recommends that Ofgem require suppliers to make the Guaranteed Standards and compensation amounts more transparent to customers. We find that customers are rarely told about them, and they are often difficult to find on supplier’s websites.

Make the Data Communications Company liable for compensation

Many smart meter issues are arise from faults on the Wide Area Network, the digital network that receives the signal from the smart meter. This is operated by the DCC (Data Communications Company) and it is their responsibility to fix these faults, not the supplier’s.

However, customers cannot contact the DCC directly which is frustrating for them and the organisations supporting them and leads to a loss of trust and confidence. We would like to see the DCC being more accountable to customers, for example through having to pay compensation, via the supplier, to customers for issues for which they are responsible.

Change smart meter reporting requirements

Changing the reporting requirements by suppliers for smart meters could be a potential mechanism for driving improvements in resolution of smart meter issues. Examples include requiring suppliers to annually report the number of non-communicating smart meters, or only being allowed to add a smart meter installation to their tally once that meter has been it has been confirmed as functioning properly.

Find solutions to signal issues

Some homes cannot connect to the smart meter network. This can be due to signal issues in the area, because the home has thick stone walls, or because the meter is installed in the basement. New smart meters are being developed which overcome some of these issues.

New-build homes should have smart meters installed in spaces where the signal can be transmitted clearly. Building regulations need to be changed to require this.

Improving trust and incentives

People in vulnerable circumstances who tell our energy advisors they don’t want a smart meter generally feel that way because they:

• Have heard negative stories heard in the media and from friends and family.
• Don’t understand how they might benefit from one.
• Are suspicious of being spied on.
• Worry about being moved onto a pre-payment meter.

These are largely issues of trust. Implementing Ofgem’s proposed changes and our recommendations will help rebuild trust in smart meters. These measures should be accompanied by a communications campaign led by Smart Energy GB.

Continue to promote smart meters, but focus on the tariffs they unlock

When the smart meter roll-out began, two main benefits were presented. Firstly, that it was no longer necessary to take meter readings. And secondly that they would reduce consumers’ usage – and therefore their bills – through better understanding of energy consumption. Neither has proved to be the case. According to Citizens Advice, nearly half of all households with smart meters still need to give at least occasional readings. And evidence indicates that monitoring your usage results in minimal financial savings.

However, smart meters offer another advantage which we believe should be more widely promoted: that they give their owner access to smart tariffs – and smart tariffs can offer consumers very significant savings. This fact should be used to make a stronger case to the public about the benefits of smart meters.

2. Smart tariffs should be as inclusive and accessible as possible

Smart tariffs benefit consumers though offering cheaper electricity according to the time of day or other factors. But most of those currently on the market are designed for higher earners who can afford expensive technology and have digital skills, and often who have patterns of consumption that can be more easily shifted to take advantage of cheaper electricity. They can be seen as the winners in the smart energy transition.

By contrast, those on lower incomes, who pay by prepayment or who lack digital skills or technology tend not to have tariffs designed for them and are missing out on many of the benefits. The gap between the best electricity unit rate available to these two groups will continue to increase unless changes are made.

Share data to enable easier tariff comparison

Tariff comparison is essential for ensuring that all consumers can access tariffs that are most suitable for their particular circumstances. However, while this is fairly straightforward when it comes to standard tariffs, comparing two different smart tariffs very difficult. This is due to the complexity of matching smart tariff structures to different technologies and different usage patterns. We know from our advice work that this is a major barrier to consumer confidence and uptake: consumers don’t want to commit to a tariff that they don’t know will work for them.

Improved sharing of tariff data from suppliers could address this challenge. Publication of real user data or calculation algorithms would help consumers or third parties such as comparison websites or organisations like CSE to quickly compare similar tariffs offered by different suppliers and assess their suitability to a client’s own needs. Standardisation of tariff metadata would also enable easier switching between smart tariffs, and prevent consumer ’lock-in’ via specific technology. It also ensures transparency because suppliers can’t change the algorithms their smart tariffs are based on after customers have switched to them.

Require greater visibility of tariff take-up and performance

There is currently very little data available on precisely who is using and benefitting from smart tariffs. This means that although the likely beneficiaries of tariffs are well understood there is little hard evidence to justify market accessibility measures. While the smart energy market is still in its early stages, suppliers should be required to provide extra information on the number and type of consumers using their smart tariffs, as well as their financial impacts. This will enable more accurate monitoring of exactly which consumers are being excluded from the smart energy transition, and progress towards greater inclusivity.

Encourage a wider range of smart tariffs

The collecting of user data as described above can be used to design and offer a wider variety of smart tariffs, so as to enable more consumers to benefit from the smart energy transition. This would help to ensure both the success and fairness of the smart energy transition.

Comparison of user data may help identify changes to existing tariffs that could support greater inclusion. These might include more managed tariffs for digitally disadvantaged groups, or more options for users with storage heaters. Suppliers should also be required – as in the standard energy market – to offer smart tariffs suitable for vulnerable consumers. This should start with prepayment customers, who currently can’t use any smart tariffs.

Ensure a progressive reform of distribution of energy costs

It is important that the cost of the smart energy transition is paid by those who benefit most from it. Left to itself, it is probable that people who don’t benefit much or at all nevertheless end up paying more than their fair share. This is likely to be in standing charges and unit rate costs for the upgrading of the network. We need to find progressive ways for these costs to be met while continuing to encourage uptake of low carbon technology.

This can partly be done through the tariff innovations mentioned above – if tariffs are more accessible more people will be able to benefit from them. But more radical reform may be needed to ensure the costs of the transition are shared fairly. Better understanding of who precisely is benefitting from smart tariffs over time will help to focus these initiatives.

3. Long-term funding for local energy advice organisations

Local energy advice organisations are well-positioned to support individuals to engage in the smart energy transition. Embedded within their communities, they are trusted and impartial sources of guidance on home energy, able to demystify smart meters and find funding for low carbon home improvements. Their well-established referral partnerships mean they reach the people who most need them in their communities, and those most at risk of being left behind by the smart energy transition.

But they often depend on short-term funding, which limits their ability to effectively plan resources, workforce and training. To play a meaningful role in the transition, they need long-term, stable funding and access to smart energy resources, training and support.

Such funding would allow for the delivery of personalised smart energy advice. Personalised advice, either face-to-face or by phone, builds trust and makes energy solutions simpler and more relevant. Our experience shows that offering a range of personalised advice —such as in people’s homes, at local events, over the phone, and via email— significantly boosts engagement, which is particularly important when addressing distrust in smart technology.

4. Training, resources and ongoing support for smart energy advisors

Energy advice organisations need to upskill through training, resources for clients and ongoing peer-to-peer support.

Smart energy training

Many organisations have told us that smart energy training is critical. Training would need to cover the technology and tariffs available as well as the specialist area of how to engage those in vulnerable circumstances on these topics. CSE has developed its own smart energy advice training through drawing on the knowledge of our smart energy advisors, retrofit experts, training manager, Smart and Fair research team and community engagement teams. Most organisations don’t have the resources to do this, and funding is needed to roll training out to advice organisations across the country.

Smart energy resources

New technology and tariffs are a lot to take in during a phone call or home visit. Our energy advisors share resources such as webpages, advice leaflets and online videos to support clients to understand their options.

Rather than each organisation developing their own resources, a better approach would be to develop resources that all energy advice organisations could share with their clients. These resources should show the financial costs and benefits of different options, and should undergo user testing and content design to ensure they meet users’ needs.

Ongoing support for organisations giving smart energy advice

At CSE, our market-monitoring research tracks new offers and trends, and our retrofit team works closely with installers and manufacturers to stay ahead on smart energy technology, allowing us to keep our advisors’ smart energy guidance up to date. However, many smaller organisations are not in this position.

Establishing a network of resources and peer support that organisations can access after training would sustain their progress. It would enable them to scale up their services effectively, get answers to complex questions and maintain the quality of the advice they provide. This need for ongoing support has been identified by advice organisations during the recent Smart Energy Advice Forum and through our evaluation of the Rural Communities Energy Support Network.

5. A national smart energy advice network

To ensure that people in vulnerable circumstances can benefit fully from the smart energy transition they need access to free, impartial energy advice from knowledgeable and competent advisors. We recommend the establishment of national energy advice network that builds on the current Find Ways to Save Energy in Your Home government helpline. A single point of contact, it would enable individuals to call one number and be connected to a trusted local organisation. If this is combined with smart energy training, resources, and support for these advice organisations, it would ensure easy access to high-quality, up-to-date smart energy advice.

Funding for such a service should be progressive, for example, sourced through taxation rather than energy bills. This approach would avoid exacerbating existing inequalities, as those on low incomes disproportionately bearing the cost of energy network overheads.

6) Changes to energy efficiency grant schemes

Grants that enable low-income households to access low carbon technologies, such as solar panels and air source heat pumps, are an important way of enabling fairer participation in the smart energy transition. Without these grants, only those with high incomes and savings would be able to install many of these measures and benefit from the transition. Below we outline three ways that the funding could be better used to ensure a fairer smart energy transition.

1) Include more smart technology in grant funding

Grant funding schemes, like ECO4 and WH:LR, should broaden eligible measures to include smart technology that allows low-income households—including those in flats— to take advantage of flexible tariffs. This could include:

• Devices to control existing systems (e.g. night storage heaters or hot water tanks) with energy price signals.
• New types of heating such as heat batteries.

Technologies that automate the process of making the most of cheap rates can be beneficial to people in vulnerable circumstances who may lack the time or capacity to engage.

Where solar photovoltaic panels are installed through a grant, batteries should be installed as standard, and installers should ensure that where possible the home has a smart meter to make the most of flexible tariffs.

2) Measure performance of installations and resolve performance issues

We recommend that for grant funded installations of technologies such as air source heat pumps, that remote or on-site monitoring and follow-up is included as standard. This is crucial for detecting and resolving performance issues, as well as ensuring the expected comfort, cost savings and carbon savings. It also helps installers learn how to optimise configurations going forward.

For social housing providers undertaking large-scale installation of heat pumps, monitoring and follow up should be included in the contract specifications:

• Require the installer to select equipment that allows remote monitoring, or to fit the right monitoring equipment at the time of installation.
• Actively monitor performance and make interventions (with customer consent) post-installation.
• The staff who manage these schemes and contracts, and those who directly liaise with residents, should have training about heat pumps and how common problems with them can be resolved so that residents receive high quality installs with ongoing support available if they need it.

3) Require post-installation advice and support

Households who have had kit such as heat pumps and solar panels installed through a grant scheme should also be given actionable advice on how to use it most effectively, otherwise we risk eroding trust in these technologies. This would include:

• Guidance on how to set the heating controls to achieve desired comfort levels without a significant drop in efficiency.
• Import tariff advice for what might now be the best options for them.
• The steps needed to access the Smart Export Guarantee tariff.

Needless to say this advice needs to be easy to understand and appropriate to the needs of the customer. Installers could offer this advice themselves, or alternatively signpost to other organisations.

Stronger together …

The steps we’ve outlined above will be far more effective when implemented together than in isolation. Stronger regulation of the smart meter rollout and the development of tariffs that genuinely meet user needs will allow financial incentives to do much of the heavy lifting — helping more people to see smart tariffs as a reliable way to lower their energy bills. For those who remain unsure or need additional support, a national smart energy advice network will provide a trusted first point of contact, connecting people to local organisations with trained advisors equipped with specialist knowledge and resources to navigate a fast-changing landscape.

Meanwhile, changes to energy efficiency grant schemes will remove financial barriers that currently prevent most low-income households from accessing the level of savings that wealthier households with low-carbon technologies are already enjoying.

As progress is made across these areas, each improvement will strengthen the others. And over time, the smart energy transition will not only be more widely embraced but it will also bring much-needed equality to the cost of home energy.