The UK government’s plan to roll out
53m ‘smart meters’ in 30m homes and businesses remains a source of
controversy among both funders and energy suppliers.

The devices, which record energy
consumption in real time, present a number of issues in terms of
financing as they are significantly more expensive than traditional
meters and will also need to be replaced if consumers change
supplier.

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Engage Consulting managing director
John Peters said: “Millions need to be installed between now and
2017. The responsibility is with the energy retailers. These are
not companies that are used to owning assets. They have got the job
of securing these meters over that period.”

The onus is on the energy supplier to
address issues such as obsolescence risk, as well as ‘churn risk’,
or the possibility customers will change supplier if they believe
they are paying too much.

British Gas, nevertheless, has decided
to ‘go early’ on the scheme and has already supplied more than
300,000 of the meters to homes and businesses in the UK.

A British Gas spokesman said: “Rather
than seeing smart meters as a churn risk, we seem them as a way of
improving customer service and retention, while attracting other
customers.

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“British Gas went early on smart
meters so we could get these benefits to our customers early and
get them understanding their energy use and saving money.”

Energy companies are known to be looking to finance the meters
through third parties to keep them off balance sheets and are
likely to be looking to the leasing market for a finance provider,
but questions remain over how deals will be structured.

 

See also:

Hurdles to renewable
energy