Smart Meters

Smart meters explained

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Find out more on smart meters with our dedicated guide.

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What is a smart meter?

A smart meter sends automatic gas and electricity readings to your supplier so they can calculate accurate energy bills for you. By 2020, the government foresees that 26 million homes will be fitted with a smart meter. According to data from the Department of Business, Energy & Industrial Strategy, almost 3 million have been installed as of spring 2016.

How do smart meters work?

Smart meters are designed to track patterns regarding your energy consumption. Regular readings are wirelessly transmitted to your energy supplier using technology that is similar to that in a mobile phone. They will mean an end to estimated bills – you’ll no longer need to send your meter readings manually to your provider or having your readings taken by a meter reader.

How smart meters work infographic

Smart meters also feature an in-home display which shows:

  • Your energy consumption: How much gas and electricity you have used in kilowatt hours in the last hour, week, and month.
  • How much you’ve spent: The amount you’ve spent in pounds will be visible on the display and is updated daily, every half an hour.
  • Your energy goals: Some smart meters come with budgeting functionality which lets you set goals for reducing your energy consumption.

Each supplier’s smart meter will be slightly different, but we believe most will show this kind of information.

There is no upfront cost for a smart meter. Instead, the cost of the smart meter will be absorbed into your energy bills. At present, suppliers are adding roughly £6 per year to energy bills to cover the roll out cost.

When will I have a smart meter installed?

The government has told energy companies to install the majority of smart meters for homes and small businesses within the next four years. Your energy provider will be in touch with the details of its specific roll out programme, including how long it will take to install your meter, and how to use it.

You are not legally obliged have a smart meter installed, and you have the right to refuse one. Prepayment energy customers are also eligible for a smart meter.

Where will my smart meter be fitted?

Your energy provider will contact you to arrange for an engineer to come to your home to remove your old gas and electricity meters and replace them with new smart meters. The newly installed meters will sit exactly in the place of your former gas and electricity meters. If they need to be fitted somewhere else, the engineer will ask for your permission.
Modern meters which sit next to each other can be replaced quite quickly, while older ones in difficult to reach areas will make the installation process a little longer.

How much will I save using a smart meter?

The jury is still out on whether smart meters will save households and businesses money. The real time display should in theory lead to cost savings, as research suggests that people who monitor their energy consumption use less.

Year Household energy bill impact (£)
2015 6
2020 -26
2025 -33
2030 -43

Source: Department for Business, Energy and Industrial Action.

But 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.

Are smart meters safe?

Yes. Public Health England has assured households and businesses that there is no evidence that shows the low frequency radio waves produced by smart meters are a health risk.

Who has access to the information on the smart meter?

Your energy company should only be able to access the data it needs to calculate your bill. Suppliers will have to get your permission if they want access to half-hourly data or to use your information for marketing purposes.

As well as seeing your energy use on your smart meter, you can also download historic data about your consumption, and share your data with third parties (such as comparison sites like MoneySuperMarket, in order to compare and switch tariffs).

After that, it's up to you who gets to see what.

Can I switch energy supplier if I have a smart meter?

Smart meters have been designed to make switching a hassle-free process.  Suppliers have to ensure the meters they install can still be used when changing to a new provider, and they keep same level of functionality.

Ofgem, the energy regulator, has also given providers rules on conduct when they install meters, so you don’t get a sales pitch when your meter is installed.

Pros and cons of smart meters

The £11bn smart meter roll out aims to update energy infrastructure that has been in place for decades, while giving consumers an easy way to see how their energy bills are made up. Here are the potential pros of smart meters:

  •  End to estimated bills:  Energy suppliers will bill you for the amount of energy you actually use, as opposed to an approximation. It will also help stop you being in credit or debt on your account
  •  Clearer understanding of your energy usage: The in-home display provides real time data on how much you’re spending. This aims to help you understand where you’re using energy, and how you could potentially reduce your consumption. 
  •  Improvements to energy efficiency: The overall programme aims to make the energy industry greener and more reliable when working out supply and demand. 
  •  Scope for dynamic and ‘time of use’ tariffs: Based on the data sent to energy suppliers, more off peak tariffs can be offered that match the usage behaviour of energy customers. 
  •  More choice for prepayment customers: Smart meters will offer flexible options for payment, including automated top up, and will help you see when you’re running low on credit.

 Smart meters however are not without their criticisms. Here’s a roundup of the cons:

  • Costs outweighing savings: The savings linked to smart meters could take a number of years to offset against the costs applied to energy bills to help with implementation. 
  • Delays to rolls out: Since the roll out project begun in 2013, there have been a number of technical setbacks, suggesting the 2020 goal is unrealistic.
  • Compatibility between devices: Each provider has its own implementation programme and some testing has shown there is difficulty linking the technology between providers.
  • Data concerns: Smart meters mean that energy companies will have more data than ever before and security breaches could pose a risk to personal data.

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