Rolling out smart water metering by 2030 would deliver huge benefits for households, the environment and the water industry, according to new analysis.
Independent research carried out by Frontier Economics and Artesia shows that a coordinated rollout of smart metering would deliver £4.4bn in benefits to society against costs of £2.5bn. That represents a net benefit of £1.9bn.
The analysis points to an environmental and social benefit of £1.73 for every £1 of cost incurred. Savings would come from improved leakage control and network management, and by avoiding the need for other water resources.
The return on investment would mean water companies incurred lower total costs, which in turn should enable reduced water bills for households over time. The study was commissioned by Arqiva, the leading UK communications infrastructure and media services provider.
Existing research by independent UK water efficiency experts Waterwise and Arqiva also demonstrates a clear environmental benefit. Fitting one million smart water meters in the UK each year for the next 15 years could save one billion litres of water a day by the mid-2030s, and reduce the UK’s current greenhouse gas emissions by up to 0.5%.
The study shows a positive benefits-to-cost ratio in all areas of England and Wales. The highest ratio is in the South-East and East of England and reflects higher existing meter penetration and greater water scarcity in those areas.
The figures also show that while smart watering metering delivers the strongest return when households are moved onto metering charging within three years of installation, there is still a positive benefit-to-cost ratio when meters are rolled out but households choose to stick with unmetered billing. This is because a high proportion of customers are expected to switch to metered charging over time, and benefits such as leak detection and improved flow estimation are independent of billing and consumer behaviour.
Research from Waterwise has found encouraging signs that the public is receptive to smart water metering. Nine in ten already have smart technology in their home and 87% would consider getting a smart water meter if it would lead to a reduction in bills and was fitted for free.
Crucially, the research highlights that metered customers are more likely to be aware of the water scarcity challenges we face in the UK, are more likely to be aware of their own water use, and are much more likely to act to try to save water.
Laurie Patten, Director of Strategy and Regulation at Arqiva, said: “The positive impact of smart water metering is crystal clear – for consumers, the environment, and for industry too. Progress is being made but more needs to be done, especially given the urgency of the climate challenge facing us all. More positive support from governments and regulators to encourage and accelerate a comprehensive smart meter rollout would see these benefits realised at a much faster pace.”
Nicci Russell, Managing Director at Waterwise, said: “We know we need to reduce water demand to adapt to climate change, secure future water supplies and protect our rivers and streams. More smart water metering would be a game-changer in helping us do this. Our research shows that people who are metered are more connected to their water use and far more likely to try to save water. In addition, the insights from smart water meter data can really help water companies support their customers with water saving, including through spotting household leaks.”
Rob Lawson, Director at Artesia, said: “These findings make a clear social and environmental case for smart water metering. While the responsibility for planning and their delivery sits with individual water companies, these companies work within a regulatory framework shaped by the government, Environment Agency, and Ofwat, and all these organisations must come together to ensure that the universal benefits of smart water metering are supported and encouraged.”
Rob Francis, Associate Director at Frontier Economics, said: “This detailed research reveals a significant and sustained opportunity where the expected gains to society far outweigh the potential costs. Furthermore, the rollout of smart metering provides the option for further benefits to be delivered in the future, strengthening the case for this technology to be deployed.”
