Energy smart meters: all you need to know

How clever is your energy meter? If you have to wait in for someone to take a reading and you don’t know how much electricity you use when the kitchen appliances are on full power, then your meter is pretty dumb.


So you might be interested in one of the next generation of smart meters. They work in a similar way to smart phones - communicating information remotely - and they are coming soon to a street near you.

Roll out of smart meters

Smart meters are part of a £12 billion government plan to modernise our energy infrastructure. The new meters have already been installed in around 180,000 homes and the government expects the national roll out of smart meters to be completed by 2020.

It’s a big job, involving 50 million gas and electricity meters in 30 million homes and businesses across the UK. And it’s costing an estimated £12 billion (the long term savings are put at £18 billion, so we’ll eventually be £6 billion ahead).

So what’s the thinking behind this venture?

Accurate bills

The big attraction of smart meters for many consumers is accurate billing. Inaccurate bills are the biggest cause of complaints about utility firms, but the smart technology allows the meter to calculate exactly how much energy you use and transmit the information direct to your supplier.

You can therefore say goodbye to estimated bills and pay only for the gas and electricity you consume.

Monitor your energy consumption

You won’t have to wait in for someone to read the meter, either. Plus, an in-house display unit lets you keep an eye on your energy consumption as it shows your real-time usage in units, as well as an estimate of the cost in pounds and pence.

In other words, if you are running several appliances at once you can instantly gauge the likely impact on your energy bills – and adjust accordingly.

Cost savings

The in-house display can lead to cost savings – research shows that consumers who monitor their consumption use less energy. It makes sense: if you can see clearly how much your power is costing, and which appliances guzzle the most energy, it is much easier to make adjustments. For example, you might decide to turn the heating down a degree or two, or use the tumble dryer only in emergencies.

The government estimates smart meters will cut our dual fuel bills by about £23 a year by 2020 and up to £39 a year by 2030, though the figures are only estimates.      

Switching to a cheaper tariff

You will probably save money by switching to a cheaper tariff - and a smart meter can make the process easier. You’ll be able to download historical data on your energy consumption from your smart meter, so you can compare prices more accurately and find the best deal for your home. In time, the meters might even allow energy suppliers to tailor make tariffs to suit a customer’s own particular circumstances. Imagine that! 

Pre-payment meters

Don’t worry if you have a pre-payment meter as you will still qualify for a new smart meter. And once the smart meter is installed, the supplier can switch from pre-payment to credit mode remotely. So no one will need to come and replace the meter if you move from one payment system to another.

It should also eventually be easier to top-up meters on pre-payment mode as suppliers are expected to offer the option to top-up over the phone, online or with an app. A smart meter can even be set so that you won’t run out of power during the night.

No upfront costs

You don’t have to pay any money upfront for a smart meter. Instead, the cost of installation and maintenance will be included in your energy bill, as metering is at the moment. You’re under no obligation to accept a smart meter and can stick with their old unit if you wish, but the government thinks the benefits are so persuasive that most of us will take on.

Supplier schedule

The official roll-out of smart meters starts in the autumn of 2015, but some companies are already fitting the new technology in some areas. Installation usually takes about an hour and you can contact your supplier for details of its schedule. The installer can offer energy efficiency advice during the visit, but it must have your permission in advance if it wants to try and flog its own products. So beware any sales pitch!

Compliance check

There’s nothing to stop you arranging for a smart meter to be fitted early if your supplier is willing. However, you should check the costs. The company should not charge any money upfront, but you might be hit with a higher standing charge to cover the expense of the new technology.

You should also make sure that the meter is compliant with government specifications or it will have to be replaced further down the line. 

‘Dumb’ mode

Customers with smart meters should also remember that they can still switch to a cheaper supplier even if the new company does not yet support the new technology. The smart meter can simply be used in ‘dumb’ mode until the new system comes on line.

Criticism of smart meters

The bright new world of smart meters sounds appealing, but there are critics of the technology, particularly of the controls it gives to suppliers. It will, for example, be easier to disconnect customers with a smart meter. It will also be more straightforward to switch to pre-payment mode, so that you pay for your energy upfront rather than in arrears, as is the case with most standard and fixed tariffs,

Vulnerable consumers

Ofgem, the energy regulator, has sought to reassure consumers by pointing out that there are strict guidelines for both disconnection and pre-payment meters to protect vulnerable consumers. For example, a company must follow the correct procedure before it disconnects a customer’s supply – and it must only be used as a last resort.

Data protection

The regulator is similarly protective about the data available on a smart meter. The supplier should not need to access any more data than is necessary to calculate your bill. The customer should also have control over the supply of information to any other companies, perhaps for marketing purposes.

Happy customers

Customers who already have smart meters are generally happy with the technology and the benefits it brings. You never know, smart meters might even reduce the number of complaints about utility firms. Now that would be progress.  







* Up to 10% can save at least £244.64, MoneySupermarket data based on sales. June 2013

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