After months of hemming and hawing, BERR said this week that smart metering would cost too much. BERR did a classic framing trick. They came up with a figure of over £16 billion as the cost of SM introduction. But that is about £340 per meter based on 45 million meters, whereas any meter provider will give you a rate of £100 today. Assume they are right and amortise that cost over the 20 year average meter life and it’s a far less scary £17 per year. Almost any study says that a minimum of 5% reduction can be anticipated producing a net saving on a £1000 average domestic bill is £33 per year. All of a sudden BERR have some holes in their figures. A giant hole is why the high cost: The California Public Utility Commission is mandating the roll out of 10.1 million meters at a cost of $165 per meter. Italy rolled out 30 million two way electric smart meters in five years at €70 each. On the subject of time frames, BERR thinks it will take at least 10 years, despite 40,000 obsolete meters being replaced every week in the UK with…obsolete meters.
If BERR ran Weight Watchers, they would throw out those tiresome scales. They think the best way to reduce costs is through competition. Out in the real world, there is a natural human response to feedback, and that is where SM will, one of these decades, work best.