SSE Energy Services failed to meet its smart meter installation target for 2019, before it was bought by Ovo Energy in January 2020.

As a result, it is to make a voluntary payment of £1.2m into energy regulator Ofgem’s consumer redress fund.

Following this, Ofgem said it has decided not to take formal enforcement action.

However, it is closely monitoring suppliers’ approaches to the rollout of smart meters, warning that it will hold suppliers to account if they don’t meet their obligations.

Larger suppliers (those with more than 250,000 customers) had to set annual targets for the proportion of their customers who would have smart meters by the end of each year.

But due to the coronavirus pandemic, in June, the government announced that the current rollout targets would be extended until 30 June 2021 and a new obligation would start on 1 July 2021, continuing until mid-2025.

Richard Neudegg, head of regulation at comparison site, Uswitch.com, said the UK’s smart meter rollout has had a bumpy ride, but even before lockdown stopped installations it was clear the 2020 target was not going to be met.

He said: “This £1.2m payment comes after SSE paid out £700,000 last year for missing its gas smart meter targets in 2018.

“Smart meters prevent the need for meter readings and provide far more accurate bills, opening up the potential for more innovative services. However, only 31% of homes currently have a functioning smart meter, which the government claims helps 80% of users to save money.

“If you want a smart meter installed now you will see some big changes to the process to keep you and the engineer safe. Companies have developed ‘no contact’ installations, which may need you to be in a different room to the engineer. Advice will be offered over the phone rather than face-to-face, and engineers will wear protective clothing and masks.”

Tony Keeling, managing director, SSE Energy Services, said: “Today’s news relates to the reporting year of 2019, predating OVO Energy’s ownership of SSE Energy Services, which it acquired in 2020.

“Since OVO’s acquisition of SSE Energy Services, we have significantly improved our smart meter rollout programme, to ensure that we can install smart meters in more homes across the UK – a crucial part of our Plan Zero strategy and the transition to net zero.

“OVO Energy has consistently met and exceeded all of its smart meter targets, with over half of its customers currently benefiting from the technology.”