People with a smart meter could see their bills reduced thanks to the new changes put in place. From May, energy regulator Ofgem is receiving new powers that will allow it to change the way smart meters work by 2025.
The changes mean people’s energy bills could be much more representative of what they actually use and when – and reduce them significantly.
READ MORE:Santander has launched a new savings account that offers high interest – and you only need £1
At the moment, information about your energy consumption can be sent once a month by default – but Ofgem wants to change this so that data is sent to suppliers every 30 minutes. The change means your smart meter will send updates and change your energy prices up to 48 times a day.
The idea is that the redesign will pave the way for “hour of use” rates, which would charge customers different amounts at peak and off-peak times.
Ofgem has previously said the price increases will lead to savings for customers, provided they shift their usage to quieter times. But households that use energy at peak times, such as doing their laundry in the early evening, could be charged more.
Ofgem is expected to be granted the new smart meter powers in May – so in just over three weeks – according to a timetable already published by the regulator. The new rules are then expected to be implemented by 2025.
Most households are currently on tariffs that charge a flat rate regardless of what time you use the energy.
Some consumers with smart meters can already access “time-of-use” rates, but must “subscribe” for updates every half hour. This is not a default setting, which Ofgem wants to introduce.
Customers who do not wish to share this data will need to request to ‘opt-out’ – but the change will not apply until the bill payer signs an energy contract.
Households with a smart meter will also have to submit a mandatory reading every day, rather than once a month under current requirements.
In a statement in February this year, an Ofgem spokesperson said: “This major system upgrade is an important step on Britain’s road to net zero.
“This will enable a more efficient, flexible and greener energy system which will save billions of pounds a year on the energy bills of all consumers. Ofgem will work closely with industry to ensure that it provides that major upgrade while ensuring that those in vulnerable situations remain protected.”
It comes after households were hit with a £700 rise in their energy bills from last Friday, after Ofgem raised its price cap for normal users. For those on a default rate who pay by direct debit, Ofgem’s price cap has been increased from £1,277 to £1,971, an increase of £693.
Prepaid customers saw a bigger increase, with their price cap increasing by £708, from £1,309 to £2,017.
Get the latest updates from across Greater Manchester straight to your inbox with the free MEN newsletter
You can register very simply by following the instructions here