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Smart meters might not look that exciting, but they can do a lot for your business. Smart meters are often talked about as the ‘future of energy metering’. The reality is that they’re already well established in the present. A significant number of businesses have already had smart meters installed by their energy suppliers ahead of the government rollout, which will hit large businesses by the end of 2014 and small businesses by 2019. In this guide, we look at smart meters and what they can do for your business.
Smart meters are a substitute for your existing gas and electricity meters. Just similar to a traditional meter, they measure how much energy you’re using. The difference is that they slightly send the data they collect to your energy supplier, cutting out the need for manual meter readings. They can send the data to your energy supplier in many different ways - some have a SIM card and send it by mobile networks, while others use Wi-Fi or other mobile internet connections.
The phrase smart meter has changed definition over the years and it is, therefore, necessary to have another category of meter. This is what is now known as an Advanced Meter. An Advanced Meter does exactly what a Smart Meter does but does not integrate with ‘smart’ appliances or display units. Instead its role is simply functional in that it is able to give half-hourly electricity and hourly gas information that is slightly accessible by the supplier and to which the customer can have timely access.
At the end of the month of September 2013, 508,500 Advanced Meters were installed on business premises across the UK. Under the pre-Smart Meter Rollout phase, businesses can choose to have an Advanced Meter installed in their premises at any point up to April 2016 without having to opt and wait for the top specification Smart Meter. This means businesses can benefit from the advantages of the core functionality of a smart meter (automated meter readings) much earlier. In addition businesses can still prefer to opt for an Advanced Meter as an alternative of a Smart Meter at any point up until December 2020 (the planned end of the roll-out) as long as the contracts for doing so are in place before April 2016. After December 2020 any new meter installation will need to opt for full Smart Meter specification.
A smart meter only won’t cut down your energy usage, but it can give you the data that will prompt awareness of your business’s energy usage and in so doing can highlight that you may have to take action. According to calculations from DECC, businesses with a smart meter should be able to save £190 on their energy bills by 2020, rising to £200 a year by 2030. In reality, many businesses may be able to save far more than this: according to the Carbon Trust, the average business wastes 20% of the energy it buys.
A smart meter means your business energy supplier always knows exactly how much energy you’ve used, the basis for accurate bills. With traditional meters, a lot of businesses end up over or under-paying their energy supplier because their bills are based on estimated meter readings rather than the real thing. The problem with overpaying is obvious - the energy supplier has money that could be put to better use elsewhere. However underpaying can be just as damaging too; the energy supplier will want their money eventually and you could be left with a high bill which you hadn’t budgeted for. Some suppliers reserve the right to recover costs for up to 6 years of inaccurate readings. Visit our guide to back billing to understand your supplier’s policy on this and how exposed you could be to errors in estimated meter reads.
The benefits of the business energy market could mean more benefits for your business. Smart meters will form part of an entirely new ‘smart’ grid. This is planned to provide business energy suppliers with much more data about the whole energy ecosystem, from the point at which the energy is sourced or generated to the point at which it is used. Energy distributors, transporters, generators suppliers, meter operators, meter readers there are a lot of players in the market and the energy we use (and the data about our usage) has to travel a long way. A joined-up smart grid would mean that energy suppliers could work out how much energy they need and when they’ll need it with a lot more accuracy. This isn’t the case currently, which means unnecessary waste and oversupply alongside shortfalls and excessive demand. With a ‘smart’ grid, energy generators could make sure they’re generating energy at the right times and in the right amounts, which in turn would make the whole system more efficient and ultimately would cut the cost of energy.
According to market analyst firm Berg Insight and Pike Research, there were 39 million smart meters installed across Europe at the end of 2008, and globally, 17m additional smart meters were shipped for installation in the first quarter of 2011. Clearly, their prevalence is increasing. A number of business energy suppliers counting British Gas, Opus Energy and SSE already offer smart meters so if you want a smart meter now you can get one. Lloyd energy will be able to help you find a supplier that can give you a smart meter and a competitive tariff. As an ‘early adopter’ who gets a smart meter ahead of the rollout, you’ll be able to start monitoring your energy usage and becoming more energy-efficient now, rather than waiting and wasting money in the interim. If you do this ahead of other businesses in your sector it could give you a real competitive advantage. However, one thing to be aware of if you go went down the early adopter route is that you may have to have it replaced later on if it doesn’t meet the industry standards set as part of the smart meter rollout. This should not be an issue for those who are opting for an Advanced Meter in the pre Rollout phase. The market for financing metering systems is grown-up and is now simply an inclusive charge on your energy bill. Having a new meter installed almost always does not require any upfront payment from the customer and should be recovered by the supplier via the energy bill in the same way business currently invisibly pays for the wages of the meter reader. Whilst any new technology will come with a price, it is confidently expected that the accurate data such systems provide will more than outweigh in efficiency improvements any increase in metering costs to your business. Installing the meter itself, on a normal site, isn’t too time consuming or disruptive, and can even be facilitated around working hours to suit your business. So going through the process twice shouldn’t be that painful, especially as any necessary secondary installation will be a case of retro fitting.