Smart Meters

How smart meters work

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Smart meters are replacing old energy meters, but what are they and what do they do?

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Smart meters are the next generation of energy meters, and they are being rapidly installed across the country. The roll-out is part of a government scheme that aims to offer smart meters to every home and small business by 2020. They’re a step up from the decades-old models we’re used to, and they could help change the way we use energy in our homes.

What is a smart meter?

Smart meters are a new kind of energy meter, being rolled out to replace the old models many people still have. They do everything the previous smart meters can do, but they also have new features that are designed to help people manage their energy usage and understand their bills – these include near real-time usage monitoring and automatic communication between the device and your provider.

Types of smart meter

There are two main types of smart meters – the older models known as SMETS 1 (Smart Meter Equipment Technical Specifications, which means the technical standards the smart meters have to meet), and the newer versions that were rolled out in 2017, known as SMETS 2.

  • SMETS 1 – These generally communicate with your supplier through 3G, and if you switch suppliers it’s unlikely the new company will be able to receive signals from this kind of smart meter. As a result, the SMETS 1 will revert back to a ‘dumb’ meter.
  • SMETS 2 – the new generation of smart meters are not yet widespread, however they do use a more advanced technology. These meters communicate through a central network of data, and in the future most if not all suppliers should have access to this – making switching easier and keeping your smart meter smart.

The smart metering programme

The government’s smart metering programme is targeting a roll out of 50 million smart or advanced meters to domestic properties and smaller non-domestic sites by 2020, and so far over 11 million smart meters have already been installed. This is a ten percent increase from the 10 million in place in the last quarter of 2017.

The hope is that once smart meters are widespread enough, the UK will be able to take advantage of a smarter grid and provide more benefits.


There are 11 million smart meters already installed in the UK

According to the Department for Business, Energy & Industrial Strategy’s latest smart meter report, showing data up to the end of September 2018. Correct as of March 2019.

How do Smart Meters work?

Smart meters work by collecting information about your energy usage in near-real time, then both displaying it for you to see, and sending it to your energy provider. This information can include:

  • Your consumption: how much gas and electricity you have used in kilowatt hours in the last hour, week, and month.
  • Your spending: the amount you've spent in pounds is visible and updated every half an hour, every day.
  • Your energy goals: some Smart Meters come with budgeting functionality, which lets you set goals for reducing your energy consumption.

This means you’re able to get to grips with how much energy you’re using and how much it’s costing you, so you can think about making cutbacks if and when you need to. Your provider gets a clearer picture too – this means they can send you a more accurate bill, rather than just an estimate based on previous usage.

It also means you won’t need to take your meter readings yourself anymore, and nor will your provider have to send someone out on a house call – the information is sent automatically, so everyone is kept up to date.

A telematics policy is on average £201.64 cheaper for 17-21 year old drivers

How do I get a smart meter?

You’ll be able to get a smart meter from your energy supplier. The plan is for smart meters to be in most homes in the UK by 2020, so you’re likely to be offered one by your supplier in the next two years if you haven’t already been. If you’re keen to get one early, it’s worth contacting them to see if it’s possible.

As the smart meters are being rolled out by area, there may already be engineers close by installing them, in which case they could be able to pop around and do yours. If not, you might have to wait a while longer, but your provider should be able to move you up the waiting list if you declare an interest.


See what areas of the UK use the most gas.

Data sourced from the UK Government, accurate as of November 2018

How are smart meters installed?

When it’s your turn to have a smart meter installed, the process is relatively simple. An engineer will temporarily suspend your energy supply, before swapping your old gas and electricity meters for the new smart meters and turning the power back on.

The new meters generally go where the old meters were located, but the engineer will let you know if they have to go somewhere else. If your old meters are very old, they could be more difficult to replace than more recent models, especially if they’re in hard to reach places.

What does a smart meter cost?

You’ll be pleased to hear that there is no upfront cost for a Smart Meter – instead the price of the meter itself, as well as maintenance, is absorbed into your energy bills. The real time display should theoretically even lead to cost savings, as research suggests that people who monitor their energy consumption use less.

However, some experts believe that any savings are likely to be short term because old habits die hard. In other words, we might turn the heating down for a couple of months, but we will then revert to our old ways.


A telematics policy is on average £201.64 cheaper for 17-21 year old drivers

Prepayment and credit plans

If you’re a prepayment or pay-as-you-go customer you should also be eligible for a smart meter – however, it may depend on whether your provider offers them on a prepayment deal. If they do, then you could see extra benefits, such as:

  • Easier top-ups – some smart meters offer the ability to top up through the meter itself, or an app on your phone, tablet, or computer – saving you the hassle of going to the shops. You might even be able to set up automatic top-ups.
  • Monitoring – you’ll also be able to check on how much credit you’ve used so far, so you can stay in control of your consumption.
  • Alerts – if you’re running out of credit, your smart meter can also alert you through the in-home display.

If you’re a prepayment customer, having a smart meter could also make it easier to switch to a credit meter – the process generally just requires a software update. Credit meters let you pay your energy bill upon receipt, and you can often find better deals on tariffs when you pay this way – however, you should always compare quotes thoroughly to ensure you know what you’re getting and how much you’re paying for it.

Economy 7 and 10

Economy 7 tariffs are ones that give you cheaper rates during the evening and night, and more expensive rates during the day. The cheaper rate period is usually seven hours, and with an Economy 10 tariff this goes up to 10 hours. These tariffs are known as ‘time of use’.

If you’re on economy 7 or 10, you might be able to get a smart meter as some suppliers are starting to offer ones that are able to juggle two tariffs – this could be especially useful as you’ll be able to see which tariff you’re currently using, and how much energy you’ve consumed under each.

However this may not be available for all economy 7 and 10 providers, so you should talk to your energy company and get all the details before accepting a smart meter.


See what areas of the UK use the most electricity.

Percentage of households that have a high usage of electricity, according to the information input by customers when switching energy with MoneySuperMarket between January and February 2019. High usage is defined as more than 3,100 kWh during one year.

Do I have to have a Smart Meter?

While the government is aiming to have smart meters in most homes by 2020, you don’t actually need to have one. Energy suppliers will in the future be required to offer them to all customers, but you can refuse to have them installed and use your current smart meter instead – these are likely to last a long time, so you should have a while to decide.


A third of customers choose a big 6 supplier when they switch energy

Data sourced from the UK Government, accurate as of November 2018

Will my data be protected if I have a smart meter?

Data protection is an important factor to consider when thinking about smart meters, because as with any online technology it can be vulnerable to hackers. However the government have set rules about how your data can be used – you’ll have the option to choose:

  • How often your supplier can collect data from your smart meter – the minimum is monthly but you can also choose daily and half hourly
  • Whether they can share this with other companies and organisations
  • If they can use your data for marketing purposes

The choices you make regarding these matters aren’t permanent – you’ll always be able to change your preferences. If you have any queries about your data, you can always contact your provider to ask.

Are smart meters a health issue?

Some people may be concerned about the levels of radiation given off my smart meters. These meters give off microwaves, which in intense bursts can cause cancer, however British Gas and Cancer Research UK have stated that the levels of microwave radiation are actually lower than those given off by TVs, phones, and microwaves. As a result, they’ve been given the all clear to use in homes across the UK.

Is a smart meters the same as a smart thermostat?

Smart meters and smart thermostats are different devices – while meters provide you with information about usage and costs on an in-home display, smart thermostats instead enable you to control your thermostat via a phone, tablet, or computer, wherever you are.

This means you’ll be able to set the temperature of your home remotely, and you’ll be able to time the switching on/off of your energy for when you leave or arrive home. However they don’t send information to your supplier, and while some do provide data about your energy consumption, it’s unlikely to be as up-to-date as the in-home display for your smart meter.


A telematics policy is on average £201.64 cheaper for 17-21 year old drivers

Can I switch energy suppliers with a smart meter?

You can always switch energy suppliers, but your smart meter may become ‘dumb’. It all depends on what type of smart meter you have installed.

SMETS 1 communicate via 3G, which means their signal is unlikely to be picked up by a new supplier once you switch – therefore they’ll revert to being ‘dumb’ meters. They won’t be able to send data to your supplier, so you’ll have to take the meter readings manually.

However you’ll still be able to benefit from the in-home display as it will have information about your usage, but as the actual energy costs are specific to who your supplier is, you may not receive this information.

With SMETS 2, they should be able to send information to suppliers as they use a central data network – all it might require is a software change/update, and you should be able to use it as normal.

Compare energy tariffs

Switching suppliers can be a good way to save money on your energy bill in general. On MoneySuperMarket, you can compare energy suppliers by factors like the estimated costs – given as an annual and monthly figure, as well as any early exit fees and the possible amount you could be saving a year.

All you have to do is answer a few questions about your home, like how many people are living there and how many bedrooms it has, as well as some about your energy usage – then you’ll be ready to look at different quotes so you can find a better deal on your gas and electricity costs. Customers who already have Smart Meters can even download and share their data with third parties (such as comparison sites like MoneySuperMarket) to help find the best quotes.

Smart meters for businesses

With a smart meter your business will be able to get a more accurate picture about how much energy you use, so you can be fully informed when you make decisions about your business’s gas and electricity. It can also be helpful in getting a more accurate quote if you and your business decide to switch energy suppliers – read our business energy section to learn more.

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