Smart Meters - The Innovators’ Challenge

Octopus has created the most innovative smart propositions in the UK energy market. However, some of our early customers are held back by the smart meter transition and some currently get a poor experience of the smart meter installation.

Here’s the background, status and what we’re doing about it.

Octopus’s innovation

The smart grid will be critical for our society to move to greener energy affordably. Unlike other energy companies who rent systems from third parties, or who have legacy systems which they’ve failed to update, Octopus has engineered a completely new system over the last couple of years which is designed specifically to deliver the smart grid.

It enables us to have tariffs which vary every half hour, so customers can benefit by using cheap electricity when the sun shines, the wind blows and the grid is “quiet” (typically cheap 21 hours a day), tariffs which provide 4 hours a night of super cheap electricity for electric car owners to charge their batteries, and we are so far the only company to pay customer for excess solar generation or “battery export” on a half hourly metered basis - enabling households to stand alongside “industrial” generation in the energy system.

Our platform is the work of a team of fantastic technology experts here in the UK, and has now been chosen by the world’s leading solar cell manufacturer for their launch of an energy supplier in Australia.

Octopus’s customer service

Octopus is renowned for excellent customer service. No company is perfect, but we enjoy high / top rankings in almost all tables and surveys. I personally lead from the front, answering 20-40 customer emails per day (every customer gets my email address) and engaging on twitter with both happy and unhappy customers.

Service issues with smart meters

Our innovative tariffs require smart meters - so unlike other energy companies who often face the challenge of persuading customers to take smart meters, we have some customers who are highly motivated to get a smart meter to start using these tariffs to save money - especially electric vehicle drivers.

Whilst our smart meter installation success level is about the same as the energy industry average - it’s lower than our usual high service standards. Not only that, but when we fail we are letting down customers who have higher expectations and who really want the meter.

I - and our team - hate this and are working very hard to improve it.

Causes of issues

Octopus has about the same success rate with meters as other suppliers - but that’s not good enough.

Everything here has to be seen in the context of the smart meter rollout. It’s a massive, phenomenally ambitious government programme - and has been impressive to date - with about 25% of all homes now having a smart meter.

The vast majority of the meters installed to date are “version 1” - known as SMETS1 meters. They were introduced as a stop-gap technology to enable the smart meter rollout to proceed in the period before the government’s central smart meter operator (DCC) was ready. However, these are perfectly good meters - their only real failing from a customer pov is that they don’t always stay smart when you switch to another supplier - although over the next year or so they will gain this capability (all the meters installed should gain it automatically with no engineer visit, etc).

DCC is now up and running and the government want all new smart meters to be SMETS2, so energy companies are now having to install SMETS2 meters.

Once the transition is complete, SMETS2 should be as easy and reliable as SMETS1.

But the transition is not straightforward, so we have a temporary period when service is hard to maintain. I give some detail on this below if you’re interested.

During the transition period there are a lot of potential failure points. For example, if we expect an engineer to fit 4 meters in a day, but the first one takes a long time to commission (one of the key issues with SMETS2 currently), the others may not happen that day. If on one day, it looks like we are achieving reliable connections to DCC, but then they subsequently appear to be not working we may need to pause further installs until issues are fixed. Contractors may be in short supply because they’d been stood down during the post-SMETS1 phase.

All this means that we are less able to give reliable appointments and service than usual.

We were previously installing perhaps 1000 SMETS1 smart meters a week increasingly smoothly. And although the “the usual” wasn’t good enough we’d been working hard to continually improve it - and it wasn’t bad - although too often, contractors have failed to turn up without calling to let you know. But with the team scrambling to work with SMETS2 issues, they’ve not been able to make enough progress on these basic installation issues either.

That all means we’ve currently got much lower volumes of meters to install, with less predictability.

So we’ve put a lot of effort into bypassing the usual systems for customers who want a meter early for our innovative tariffs (or other urgent reasons). However, this means we are working at the ragged edge - trying to arrange an install as soon as it may be possible - which means there’s a higher chance of issues. And when you bypass usual processes you inevitably get more problems - for example, our system may not always “know” what one of our team have arranged for a customer.

It’s a classic dilemma in business - do you whatever it takes to bring something to a customer, or rigidly stick to the process?

We’ve chosen to work hard to get meters to the most “engaged” customers as soon as feasible, with the risk that it can go wrong. We try to be transparent about this at all times - and from me publishing my email, to our metering director giving his mobile number to affected customers, I hope we get the balance right and we can all share in the process.

What else we’re doing

Aside from SMETS2 transition issues, I’ve been open that we are not always happy with the service we get from traditional installers (used by most of our rivals too) - so we’ve set up our own. It’ll take a while to get up to speed but our first 9 vans are already in service…

We’re doing this so that we can bring the proper Octopus experience to the job of meter installation as well as energy supply.

What you should do

If you’re after one of our smart tariffs - just let us know. We’ll add you to a VIP list and prioritise you for an early install. We’ll learn from past errors to ensure we stay in touch throughout, but also we’d be delighted if you could let us know if you’re worried about an engineer failing to turn up or if they cancel at the last minute (the contractors should stay in touch, but despite all our efforts we know that sometimes they fail to do so - but the quicker we know the quicker we can escalate to their managers and fix it).

We’ll install the best meter we can for you - so it’ll be a SMETS2 if that’s appropriate or propose a SMETS1 if that’ll be better. If it’s a SMETS1 it won’t count towards our government rollout targets, but we just need to give customers the best experience and service and will prioritise that from here.

Otherwise, we’re making good progress on getting the SMETS2 scale rollout up and running and will be in touch with you when we know we can install a meter for you through the standard, smoother processes.

Some extra details on SMETS1/SMETS2 transition

Note: we support all the government is doing here - they’re forcing the pace of smart meters - and as we all saw with SMETS1, sooner or later we can get smart meters in really high numbers of households quickly. The only thing we’d do different is to continue to promote SMETS1 where a SMETS2 wasn’t installable so that we could maintain pace of rollout and reliability.

1. It wasn’t possible to properly plan for SMETS2. We (and all suppliers) are dependent upon DCC - a monopoly service we need to connect with. There were multiple delays in its go live, so suppliers had to be “on standby” rather than be fully planned.
2. Connecting with DCC has been challenging for early suppliers. Whilst DCC is carefully specified, it’s a very complex ecosystem. Connected to a meter is a comms hub. there are two comms hubs (one for “the North” and one for “the South” as there are different networks in each), the comms hubs talk to DCC who talk to a “connector” (another company) which then talks to a supplier. There are dozens (maybe hundreds) of “messages” each of which need to get through this infrastructure. There’s a lot of security which means we don’t get the sorts of diagnostics you’d get in most systems - so things either work or they don’t, and fixing things is very much “trial and error”. Every energy supplier has a different combination of meter manufacturer, connector, software system, installer, etc. so there are no “right answers”.
3. The comms networks are very very sensitive. Things which work in a lab may not work in homes, and many meters produce “electrical noise”. This electrical noise can swamp the signals from the smart meters, so many early SMETS2 meters were basically not usable and even some which are usable are “non-compliant”. Some had “derogations” allowing them to be used, others didn’t. During this process, some of the meter manufacturers who’d looked like they’d be ready first ended up at the back of the queue. However, by the time these sorts of issues became apparent suppliers had already placed orders with manufacturers, and those which were given derogations - or were deemed compliant - had very long lead times as they were in hot demand as the only usable meters.
4. The government recognised many of these issues, so allowed suppliers longer to keep installing SMETS1. At one point, the SMETS1 cut-off date was October 2018, and then extended to December 2018 and some suppliers were given “derogations” to March 2019 - although these derogations were based on historic installation rates which basically ruled out fast-growing challengers like Octopus.
5. This has been a learning process for the whole system - with everything revolving around DCC, they first had to learn a lot of the issues, and then meter manufacturers, suppliers and installers.
6. Meters are owned by MAPs - essentially companies who fund their purchase and install on behalf of suppliers.
7. With all the uncertainty, MAPs, installers and others have struggled to be confident. In the case of MAPs they have been hesitant to back SMETS1 as a fallback, and each has relationships with specific SMETS2 manufacturers. Installers have often assigned engineers to other duties or even stood them down because they’ve had no meters to install, so as we start ramping up SMETS2 there are resourcing challenges as well as all the technical ones, and can mean that rafts of appointments need to be rearranged or cancelled, sometimes at short notice.