Smart meters are revolutionising the way consumers engage with their electricity purchase. As a tool to help facilitate new technologies, especially batteries and electric vehicles, and as an enabler of innovative new tariffs and consumer engagement products, smart meters are a welcome, if sluggish, infrastructural development in the UK. In terms of global adoption of such technology, the UK is behind the eight ball. But the advantage of being a follower of such technology is retrospect. Energy retailers have the opportunity to look to early-adopter nations to analyse the strategies tried, tested and proven by leading energy companies operating in a smart meter driven world. And as we’ve seen play out in those early-adopter nations, those that actively respond to the opportunities and challenges that smart meter technologies introduce are the companies that will ultimately thrive.
The UK smart meter rollout has been underway since 2011 and, after a delay following public health advice related to COVID-19, is due for completion in June 2021. According to the Department for Business, Energy and Industrial Strategy, “The rollout of smart meters will represent up to £16 billion in annual savings on the cost of reaching net-zero emissions by 2050 thanks to creating a more flexible, cleaner energy system, while small businesses with smart meters collectively save around £1.5 billion each year on their energy bills.”
In the UK, the opportunities presented by smart meter technology are rife. The fact that roughly 50% of UK consumers remain stagnated on Standard Variable Tariffs indicates that the majority are disengaged with their energy purchase. With the introduction of smart meters, savvy energy retailers will be looking to design and deploy customer engagement solutions to pique the interest of those stagnated customers, and grow their customer book. Similarly, new entrant energy retailers will enter the market using smart meter data to reduce costs, increase efficiency, improve customer service and offer new services and tariffs.
Here in New Zealand, since the game changing rollout of smart meters nationwide, new entrant retailers have grown their market share rapidly, forcing the incumbents to diversify their offering or risk slipping behind. Smart meters have improved service and offered more choice to energy consumers with the adoption of innovative business models by new entrants and existing retailers alike. The steady rollout of smart meters in the five year period leading up to 2016 saw 21 new retailers enter the market, culminating in an ICP (meter) switch rate of 20% in 2015, up from 16% five years earlier and just 9% in 2006 when the rollout began. That switch rate of 20% across the year has remained relatively steady up to 2021 as the ease of switching becomes increasingly publicised and new propositions continue to motivate switching behaviour.
The question UK energy retailers should be asking themselves is whether their retail software can meet the challenges of a smart meter driven world. Smart meters represent the gateway for prosumer technology, such as battery and grid connected home generation, to mainstream adoption. They enable time-of-use tariffs, benefiting consumers, and our planet, through cost reflective pricing, thereby facilitating cheaper off-peak charging for electric vehicles. Critically, they present an opportunity for energy retailers to introduce innovative new offers, such as free power timeframes, wholesale tariffs and smart prepay services like those we have seen in New Zealand. As new modes of energy engagement emerge, British consumer expectations will rapidly evolve; retailers must be empowered to design and deploy innovative solutions without software limitations. Will your billing software allow you to remain relevant amongst increasingly diverse competition and consumer demand?
Flux was established in 2009 during the early years of the smart meter rollout in New Zealand. Our software is designed for a smart meter world, and has proven capable of ingesting and processing smart meter data to offer a more efficient, smart and seamless experience to our clients and their customers. Our advanced FlexiBill product has been developed to allow energy retailers to bill any tariff and price any plan, demonstrating absolute proficiency in smart meter data processing and allowing our clients to design innovative customer engagement solutions without limitation. Our clients can reach new market segments, including commercial and industrial, and serve all meter categories and data types. We enable our clients to serve DER connections, to offer behind and in-front of the meter propositions, and to offer interval billing for promotional price-based products.
In order to thrive in a smart meter world, you need to have the operational capability to keep pace, and indeed lead, the response to emerging technologies, diverse propositions and evolving consumer expectations. Established in a smart meter driven climate for innovative and future-focused energy retailers, Flux is the ideal partner to help retailers navigate the opportunities and challenges of such a game changing development in the UK market. Talk to us about how we can help your business get ahead - innovation starts today.