The Department for Energy Security and Net Zero (DESNZ) has encountered difficulties in meeting its latest targets for the smart meter rollout, according to a report by the National Audit Office (NAO).

While progress has been made, the report reveals challenges faced by the DESNZ in achieving its goals, including a shortage of installation engineers and disagreements with suppliers.

Recent data reveals that over 32 million meters in the UK, accounting for 57% of the total, have been upgraded to smart meters.

However, approximately three million smart meters, constituting around 9% of the installed base, were reported to be not functioning as intended as of March 2023, according to the UK’s independent public spending watchdog.

In 2019, the DESNZ predicted that the benefits of the smart meter rollout would reach £19.5 billion for consumers and small businesses.

However, it is now anticipated that the actual benefits per meter will surpass this estimate, primarily due to soaring energy prices and the emergence of innovative technologies that enhance savings.

The DESNZ had forecasted the total costs of the rollout to be £13.5 billion based on the same 2019 analysis.

Yet, the cost per smart meter is likely to exceed expectations, primarily because average installation expenses have proved higher than anticipated.

A shortage of engineers is one factor contributing to the increased costs, among others, the NAO has said.

Gareth Davies, Head of NAO, said: “The rollout is now at a crucial point – and the department should ensure it has robust information on both the total costs and benefits of smart meters to make decisions from an informed position to maximise value for money.

“DESNZ must now work with suppliers to get the programme on track, for the benefit of millions of consumers and small businesses and government’s wider environmental goals.”

Responding to the National Audit Office report on the smart meter rollout, Gillian Cooper, Head of Energy Policy at Citizens Advice, said: “Smart meters have the potential to bring huge benefits to consumers and are central to building a green energy system fit for the future.

“The NAO report raises important questions about the current health of the rollout. These issues must be addressed to ensure households can benefit without the cost of the programme spiralling.”

A Department for Energy Security and Net Zero spokesperson told ELN: “As the NAO recognises, we’ve made good progress in the rollout of smart meters with over 32 million now in homes and small businesses across Great Britain, putting them in control of their energy use and saving money on bills.

“But we want more people to benefit as soon as possible. That’s why we’ve set energy suppliers ambitious but realistic installation targets and are working with them to speed up the rollout.”