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Meeting the Metering Challenge in Social Housing

Expert Insight

12 October 2023

Not maximising the rollout of smart meters across their estates is starting to have a direct impact on the ability of Housing Associations to secure the most favourable contracts for their energy supply. This is because some leading suppliers are increasingly reluctant to contract across estates that they fear will have a negative impact on their mandated smart meter rollout targets. So, what’s the context and what can be done to best address the challenge?

The often-quoted mantra is “what gets measured gets managed”; and this was in large part the government’s intent when mandating the rollout of smart meters (SMET) to support the achievement of Net Zero commitments and the management of a greener energy grid.

From January 2022 all suppliers have binding annual installation targets to rollout to their remaining non-smart customers by the end of 2025. Suppliers must publish their annual targets on their websites. Each year the targets are re-set based on the proportion of a supplier’s customer base without a smart meter.

Slow Progress…

As of the end of June 2023 over 33 million smart meters were in homes and small businesses across the country.

The planned rollout now covers 58% of all meters but this still leaves a worryingly high percentage that needs to be addressed in just over two years. Feedback from both suppliers and housing associations alike has highlighted a particular challenge in accelerating the rollout across the social housing estate.

A Shared Motivation

Housing Associations understand that their customers want accurate billing, especially in these times of high prices and stretched household budgets. The installation of SMET provides a permanent, efficient, solution and the access to Half-Hour Data (HHD) across the non-domestic parts of the estate can also help to support energy efficiency initiatives and carbon reporting commitments.

Whilst suppliers are currently missing their meter installation targets, they have so far been exempted from sanctions due to the impact of Covid-19. However, regulatory pressure is now being ramped up on suppliers. They, in turn, are taking steps to both improve SMET take up in the social housing sector but also avoid contracts that may negatively impact them achieving their meter
rollout targets.

A Significant Risk

Suppliers face several regulatory sanctions if they fail to hit their targets, which can include significant fines, a ban on selling new supply contracts and ultimately the suspension of their supply license.

The risk to a supplier’s business is therefore significant, and consequently they have had to start to take a number of actions to mitigate their risk:

  • Suspending automatic contract extension clauses in existing contracts.
  • Placing contract restrictions (such as contract length) on contracts that pose an SMET challenge.
  • Not supply contracting where the number of installed SMET hinders their regulatory requirements. This also has the impact of limiting consumer choice in terms of suppliers.
  • Or simply, not supply contracting estates with housing associations.

However, ultimately suppliers do want to sell/renew energy contracts and so are targeting gaining access to meter reads via the Housing Associations as this will make a greater impact on achieving their targets. They are also asking clients to participate in SMET installation mobilisation calls, to engage with them and the metering company to increase the number of Smart Meters installed.

Growing Pressure

However, there is a strong possibility that the pressure on suppliers and housing associations alike could increase because of an active “call for evidence” that is currently underway from Ofgem.

  • More Non-Half Hourly (NHH) supplies could be required to go through the Settlement process, which is how the network balances what consumers have used and where a HHD enabled meter is a pre-requisite.
  • It could be viewed that a failure by the consumer to enable actual meter reads to be taken, or facilitation of Smart Meter installation could be a breach of the supply contract.
  • There may be a new direct legal requirement for landlords to have Smart Metering installed.
  • Potentially a requirement for Smart Metering could become a pre-requisite to sell a property.

Overcoming The Blockers

Our dialogue with suppliers and Housing Associations alike has illustrated a mutual motivation to make greater progress and a shared drive to overcome some of the current blockers. The supplier, housing association and metering company all have a role to play and Inenco is increasingly acting as the “glue” and communication conduit for this triumvirate of stakeholders.

Inenco’s project management capability covers undertaking a scoping session with the housing association, instructing the metering company, corralling the required property list and contact data, monitoring, and managing metering company performance and reporting progress back to the housing association.

There is a growing commercial imperative for Housing Associations to act proactively to engage with their supplier and metering companies to avoid a narrowing of energy contract options that could negatively impact them both corporately and lead to higher service charges for their customers.

To find out more about how Inenco can support you through this process please contact your Inenco Account Manager or contact enquiries@inenco.com
08451 463 626
www.inenco.com

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