Impact of smart prepay meters on fuel poverty could be profound and positive

180,000 households could be lifted out of fuel poverty, our report says

17 October 2016

Smart prepayment & fuel poverty is a new report, written by CSE for Eaga Charitable Trust and Citizens Advice.

It summarises research by our Research & Analysis department into the effects of the growing use of smart prepayment meters on fuel poverty, particularly amongst households already using conventional prepayment meters. This group has historically been poorly served by the energy market, for example in lack of access to the cheaper tariffs available to (usually better off) direct debit customers.

Nicky Hodges was the lead author. "This report adds to our understanding of how growth in the installation and use of smart technology may affect fuel poverty amongst consumers who already pay for their electricity via prepayment meters.

"Our modelling indicates that smart prepayment meters could lower the cost of energy enough to lift around 180,000 households out of fuel poverty whilst narrowing the fuel poverty gap [e.g. the amount of money those remaining in fuel poverty fall short of being able to heat their homes adequately] on average by £108, or from £449 to £331."

To date, installations and consumer trials of smart prepayment meters have been relatively few, with the suppliers Utilita, Ovo and British Gas at the forefront of a generally sluggish field. The industry-wide schedule for smart metering has been repeatedly delayed, with the rollout for prepayment-enabled meters coming later than that for normal ‘credit’ meters.

Smart meters come with an in-home display for consumers to view information on their energy usage in £ or in kWh. The research investigated how early adopters of smart prepayment meters use their in-home displays for credit checking purposes and to keep track of and make choices about their energy usage.

The research findings emphasise the importance of the smart meter installation code of practice (SMICoP) requirements for guidance on using the in-home display and providing energy efficiency guidance for prepayment consumers. It identifies recommendations aimed at Ofgem, BEIS, Smart Energy GB, Energy UK (the industry umbrella body) and suppliers aimed at enabling fuel poor prepayment consumers to realise the benefits offered by smart metering.

Download Smart prepayment & fuel poverty here. Download a summary here.

The research was funded by Eaga Charitable Trust and Citizens Advice. It also drew on findings from a previous CSE research project funded by the Chesshire Lehmann Fund.

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