Hundreds of thousands of homes connected to UK heat networks are unmetered – resulting in major energy waste that increases both bills and carbon emissions.
The best solution to stem energy losses and increase cost and carbon savings on unmetered residential district and communal heating schemes is to install smart heat metering systems.
Digital smart heat meters provide residents with an in-home display – that shows how much energy is being used, what it's costing and how much carbon is being emitted. Accurate bills can then be produced, according to the exact energy use of a specific home.
This contrasts sharply with unmetered properties, where residents are charged a fixed flat rate that is calculated as a share of the total heat network fuel costs, irrespective of whether they use lots or little energy. As such, there's little incentive to save energy.
What are the benefits of switching unmetered heat schemes to smart metering?
- Save money
The most obvious and immediate benefit of installing smart heat metering on unmetered heat network schemes is that residents' energy costs reduce dramatically.
We have retrofitted pay-as-you-go smart heat meters into thousands of social housing properties that were previously unmetered. This experience has proven that energy spend decreases by 35 to 50%. That's because residents have visibility of their costs and consumption and a powerful financial incentive to moderate energy usage.
There's a big behavioural shift, where residents start turning off the heat when they go out and turning down the heat rather than opening windows when they get too warm.
New generation pay-as-you-go smart meters also combine the billing and flexible payment process – making pre-payment a preferred option to credit billing for many residents. These metering system give the residents on communal heating schemes the same experience as those with gas and electricity smart meters.
Record high gas prices are further improving the payback of installing individual smart metering systems in homes connected to unmetered heat networks. Gas prices have increased by around 250% since the start of 2021, but our financial modelling reveals that even with a more modest 100% or 150% gas tariff rise, installing smart meters results in big cost savings. Although gas prices may soften in future, market forecasters expect tariffs to remain higher than low 2020 prices
See how Sheffield City Council tenants are saving hundreds of pounds with smart metering
- Reduce carbon emissions
Retrofitting smart meters reduces bills, but using energy more efficiently also creates lower carbon emissions.
The UK heat network must transition from predominantly gas fuelled schemes to renewables. But the difficult challenge is to create affordable, low carbon schemes that provide green energy at a price residents can afford.
Cost saving smart meters can help to mitigate higher costs of making this transition. The technology works seamlessly with any centralised heat system, without requiring adjustments – providing a future-proofed solution to the low and zero carbon heat networks of tomorrow.
- Comply with regulation and best practice
The government is committed to improving the energy efficiency of buildings and decarbonising the heating sector. To this end, its Heat Network (Metering and Billing) Regulations are driving the retrofitting of final customer metering on unmetered heat network schemes, wherever it is technically and financially viable. This is determined by using a cost effectiveness tool assessment.
Heat network suppliers must complete assessments by 27 November 2021 for all buildings that are deemed ‘open’ class. Where the assessment proves viable final heat meters must be installed by 1 September 2022. This is likely to involve the use of smart heat metering.
Higher gas prices mean that this assessment is more likely to prove financially viable. In fact, we believe that actual savings will be much higher than those predicted by the assessment tool, which estimates the demand reduction benefit of smart metering and billing at 20%. Our experience shows that this is in excess of 35% and up to 50% in many UK social housing schemes.
Re-assessment of final metering requirements is required every four years.
It is already mandatory for new build projects and most buildings undergoing major refurbishment to fit final customer heat meters
See how our S2 Meter2Bill service can simplify your compliance needs
- Improve customer service, fairness and transparency
When customers on unmetered district heating schemes move to smart metering, they have complete visibility of their energy use and costs, which gives them control and transparency. They are able to make conscious, informed decisions about how they use their energy and take steps to minimise costs and carbon emissions.
Residents know that they will be charged fairly according to the exact amount of energy they consume and can budget accordingly, rather than relying on estimated billing and the fear of 'nasty surprise bills'.
- Reduce debt risk
Smart heat metering delivers big savings on energy bills – making the likelihood of residents defaulting on payments less likely. Gaining visibility of heat use and costs also enables residents to budget better and meet their billing obligations.
The switch to next generation pay-as-you-go smart meters avoids the issue of payment defaults as residents pre-pay for the energy they use. Digital smart meters make it possible to identify financial difficulties at the earliest opportunity, so that debt can be managed effectively and fairly.
- Inform efficiency improvements across entire heat network
Smart metering helps inform heat network efficiency and optimises performance, which can deliver major operational improvements – leading to further cost and carbon savings.
To transform performance of existing heat schemes we use our Artificial intelligence (AI) enabled Optimise technology to gain complete visibility of heat network performance issues. To diagnose areas of efficiency, we rely on complex data analytics from all metering, including smart heat meters, Building Energy Management Systems (BEMS), sensors and other measurement points. This enables us to intelligently target efficiency improvements for maximum impact – leading to average 35% energy savings.
As heat networks transition from gas to new low and zero carbon heat sources, it is essential to optimise whole network efficiency in readiness for next generation systems. This is essential to reducing costs and minimising emissions. Achieving lower temperature operation is essential in readiness for conversion to heat pumps.
Smart meters are also essential to improving heat network design, providing demand and diversity data that is key for ensuring schemes are designed correctly and not oversized.
Don't wait for smart metering
Current regulation will ensure that most existing unmetered heat networks will switch to smart metering. Those that are left behind should consider the many benefits of converting, regardless of legislation.
This will be a more pressing decision in the likely event that gas prices remain at higher levels. In this event, the vast majority of schemes will become financially viable – leading to a better deal for customers and multiple benefits for landlords too.
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