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Why social landlords need to think seriously about smart meters
Smart meters in the sector have had a slower than anticipated take-up. David Blackman investigates Illustration by David Humphries. Photography by Alamy
When the government wants to put out public information these days, it calls up a mascot.
Step forward Gaz and Leccy, the anarchic cartoon characters tasked with helping to persuade us to install a smart meter to replace analogue meters in our homes (see box: Smart meters: a brief history).
While Gaz and Leccy are colourful cheerleaders, the programme has not been without its teething troubles, including concerns about faulty installation potentially causing unwary social landlords and their tenants serious problems moving forward (see box: Faulty installations).
"This is an asset management issue that the housing sector needs to think about."
It is also behind schedule for meeting its 2020 target when all gas and electricity customers should have been offered a smart meter – with the knock-on implications for fuel poverty that this implies. For several reasons, therefore, this is an asset management issue that the housing sector needs to think about.
Social landlords have a long history in this area. Rewind 10 years and they were in the vanguard of lobbying for the devices, which the National Housing Federation saw as a potentially powerful tool for helping to crack the scourge of fuel poverty.
"What are the practical implications of this revolution for social landlords?"
Now the smart meter roll-out is an expensively advertised reality, what are the practical implications of this revolution for social landlords and their assets moving forward?
One important point is that even if poor work could have dramatic knock-on impacts and the success stories might help reduce tenants’ bills, there is no obligation for social landlords to become involved in the installation.
“The direct contractual relationship would be with the customer,” says Steve Storey, director of energy services for Spark Energy, a utility company which specialises in supplying tenants in the private and social rented sectors.
“If the tenant is the bill payer they are entitled to have a smart meter and don’t have to apply for permission from their landlord,” says John MacNeil, head of policy and communications for Scotland for Smart Energy GB, the government body set up to facilitate the meters’ roll-out.
While there is no obligation on social landlords to have smart meters installed in their properties, it is widely seen as good practice.
“We advise tenants that it’s a good idea and every household should have a meter.”
“The onus is on the industry to roll out smart meters but this is something they would do as good landlords,” says Lewis Taylor, managing director of Energy Angels, which specialises in arranging installations for social landlords, including WM Housing Group.
Cartoon characters, Gaz and Leccy, are used to promote smart meters
Chris Thomson, head of assets at Castle Rock Edinvar Housing Association, agrees: “We advise tenants that it’s a good idea and every household should have one.”
A key opportunity to install easily and on-scale happens during the reletting process.
For many social landlords, such work has become standard practice when properties are void. With an annual tenancy turnover rate of 8%, Mr Thomson says that it should be possible to install smart meters across a big chunk of Castle Rock Edinvar’s properties within a relatively short period.
For many social landlords, such work has become standard practice when properties are void.
Already, he says that smart meters have been installed in 400 of the registered provider’s 8,000-plus properties while they were void.
Mr MacNeil says that exploiting the void period cuts down the proportion of tenants who need to be encouraged to have one of the devices installed.
And it avoids one of the big bugbears of the smart meter process: having to stay in while it is installed, he adds: “It means no waiting for an appointment or the potential for the tenant to forget and be out and the work not being done properly.”
For the landlord, meanwhile, the benefit of smart meters is that it helps to avoid one of the headaches of the void process: no electricity when maintenance and management work is being carried out.
“The typical thing is that workers arrive at properties and find there is no power, so they can’t carry out the work,” says Energy Angels’ Mr Taylor.
Spark Energy’s Mr Storey says it can also be a difficulty when properties use standard prepayment meters.
“If you go in to clean or carry out an inventory and there is no key card, you can’t use a vacuum cleaner and you have to waste time going to the shop to get a card and top it up. With a smart meter you can do away with all of that.”
The installation of smart meters can also smooth out the move-in process for the tenant by ensuring that energy to the property is up and running immediately.
“We take the problems that would typically present to the tenant on day one and resolve them on day one of the void. The result avoids delays and improves the tenant’s experience when they move into the property,” says Mr Taylor.
So what should the landlord do if the smart meter goes wrong?
“If a meter fails in the analogue world, the tenant will probably phone the landlord but it would be up to the supplier to resolve the issue. Whatever happens in the analogue setting will continue in the smart meter world,” says Mr MacNeil.
“The meter itself is not the landlord’s property. If anything is wrong, it’s down to us to resolve and organise it,” says Mr Storey.
The exception will be if the fault develops because of a problem in the property, such as a fuse board being incorrectly wired, which the landlord would be responsible for correcting, he says.
However, landlords would also be wise to think about problems that could arise from faulty installation.
Providing tenants with a budgeting tool, in the form of a smart meter, should help to keep down arrears
Financial benefits
Clearly there are also benefits for social landlords who take a lead (see box: Smart meters: A brief history). For starters, in return for securing agreement to install a smart meter, Mr Taylor says they may be able to negotiate spin-off benefits, such as a £20 top-up and a cut in the standing charge so that the property is not racking up bills for the landlord while it is empty.
Helping tenants to manage their fuel bills doesn’t just help social landlords to discharge their welfare responsibilities, it makes broader financial sense in terms of sustaining tenancies.
Energy bills are one of the major items of expenditure which hard-up tenants have to juggle, alongside their rent payments.
“If the tenant moves out, technically housing associations won’t have the data unless the tenant wants to hand it over.”
And following the scrapping of direct benefit payments to landlords as part of the Universal Credit roll-out, it will be increasingly tempting for cash-strapped tenants to build up rent arrears to keep the heating and lights on. Providing the tenant with a budgeting tool in the form of a smart meter should help to keep down arrears.
In addition, if they can tap into the data flowing through their residents’ smart meters, social landlords will be able to offer better targeted advice to tenants. An example is Castle Rock Edinvar, which has an energy advice team that works with tenants.
“A housing association could then take the data and provide bespoke energy advice to that property if they were either over or under-heating it,” says Smart Energy GB’s Mr MacNeil.
“If the household is happy for the housing association to see the data they could provide bespoke energy information and they can make sure the home is heated correctly at the appropriate point.”
And in the longer run, he says that smart meter data could be used by associations to help tackle energy efficiency in their stock. The government suggested in its recently published Clean Growth Strategy that smart meter information could be used for assessing how well buildings are
performing in energy terms.
“If they are seeing a batch of housing that is inefficient from the meter data they can target those properties to make sure they are getting the investment into the right places at the right time,” says Mr MacNeil.
The fly in the ointment is data protection legislation which means that the tenant must give their consent for landlords to access the information contained in the smart meter.
Mr Taylor says: “If the tenant has been using a smart meter throughout their tenancy and they move out, technically the housing associations won’t have that data unless the tenant wants to hand it over.”
While many social landlords may decide to take a back seat, it is clear, however, there are numerous advantages for those who take a more active approach to the installation of smart meters.
From saving tenants money to protecting their lives and properties, it is sensible for asset management teams to take a lead.
Faulty installations
It’s never a good sign for any big consumer initiative when it appears on Watchdog. So far, the smart meter roll-out has featured on BBC One’s flagship consumer programme twice, most recently last summer when it reported a gas leak as a result of a washer being left off one of the devices and another instance where incorrect wiring had caused a fuse board to burn out.
Chris Bielby, chair of the Gas Industry Safety Group, says poor quality installations usually stem from inadequate training by suppliers which are themselves under pressure to rapidly roll out the programme.
He says: “Rather than proper duration and quality courses, they [the installers] were under pressure to go on three and five-day courses.”
Full training for smart meter installers should take 16 to 18 weeks, says Mr Bielby, whose group is carrying out a review with a view to developing a set of higher quality standards for the industry. He adds that the actual installation is the responsibility of the gas supplier but landlords have a responsibility to check that the staff carrying out the work are qualified.
Smart meters: a brief history
The drive to make smart meters mandatory dates as far back as when Ed Miliband was secretary of state for energy in the last Labour government.
The devices are intended to replace analogue meters. These old-fashioned meters have to be physically checked so bills tend to be estimates. With smart meters, it is possible for the customer to check their energy consumption in real time using in-home displays (IHDs), which are an increasingly common feature on kitchen worktops.
However the roll-out, which is being funded by energy suppliers indirectly, is taking longer than envisaged when it began three years ago.
The government has said that every household and business must be offered a smart meter by 2020. So far, about eight million smart meters have been installed by energy suppliers – only a fraction of the 30 million devices that will have to be installed in homes and small businesses to meet the goal of full coverage.
Despite this problematic roll-out, the smart meter evangelists believe that it will reap huge benefits, particularly for the lower-income households more likely to be found in social housing.
Smart Energy GB’s Mr MacNeil, says: “We’ve never said this was a silver bullet but just one more tool for them [tenants] to manage their energy consumption and have a better understanding of what they are spending. They have never had accurate data previously.
“It encourages them to change their energy usage behaviour by using energy at different times, or understanding which appliance they are using more than others and then alter their behaviour accordingly, so they are using less energy or using it more wisely.
“It also removes the inconvenience of having to go down to the local shop, which may be useful for someone who has mobility issues. They would not have to go out at 10pm on a cold winter night and could simply top up the smart meter 24/7 from the comfort of their home.”
Castle Rock Edinvar’s Mr Thomson agrees: “Smart meters allow tenants to visualise what they are spending each day so they can budget accordingly.”
This includes a group of tenants who the association discovered were disconnecting themselves from the gas supply because of fears about paying bills. Allowing tenants greater control about their energy consumption could reduce the prospect of spiralling bills, he says.
