What exactly is a smart meter and should I get one?

Smart meters are the new generation of gas and electricity meters. They are being rolled out across the UK to replace the traditional meters which many of us still have ticking away in the cupboard under the stairs. The government says smart meters are crucial to making homes more energy efficient. The ambition was to have meters installed in most homes by 2019 but the scheme has now been pushed back to the end of 2025. In total, the £35bn programme aims to fit up to 54 million meters in homes and small businesses across the UK.

How do smart meters work and what are the benefits?

Smart meters measure how much energy a household uses. Separate meters are needed for gas and electricity. The meter is “smart” because it communicates via a remote connection with energy suppliers. Energy suppliers are responsible for installing smart meters and making sure they work. There is no upfront cost to the consumer and other benefits include:

• Automatic meter readings – Smart meters automatically send information on energy consumption to suppliers every 30 minutes, so eliminate the need for manual meter readings. No more scrabbling around in dark cupboards or garages to read the gas or electricity meter.
• No more estimated bills – households are billed more accurately on actual usage. By comparison, standard meter customers are often charged based on estimated usage, followed by a manual meter reading every few months to get a more precise bill. As customers have more information on day-to-day energy use, there shouldn’t be any nasty surprises at billing time.
• In-home digital display – part of the kit includes an in-home digital display.The device communicates with your smart meter to provide real time information on energy consumption. Readings are in kilowatt hours (kWh) and pounds and pence, making energy use easier to understand. From toaster to tumble dryer, you can see where you can save energy and money. This cuts bills and carbon emissions.
• Take advantage of cheaper tariffs – Smart meters help households to take advantage of cheaper tariffs which incentivize customers to shift their energy use to off peak hours when demand is lower and supply is plentiful. This reduces strain on the National Grid during peak periods.
• Upgrade to smart grid - Nationally, smart meters can help us manage our energy better. They are seen as central to a shift to a cleaner, more flexible energy system. By providing better information on energy consumption in homes and businesses, it should be easier to create a more sustainable energy supply network at peak times, including wind and solar power.

Who is responsible for installation?

Energy companies are responsible for installing smart meters. It’s not compulsory to have one installed but if you refuse, you may miss out on the cheapest tariffs and could pay more for energy. In March 2023, only 57 % of households had a smart meter installed. Energy companies are required to fit a smart metre if they are replacing a traditional meter or installing a meter in a new home. So, if your meter is faulty or at the end of its working life, you will be required to have one. However, there are clear benefits to having a smart meter, so it’s worth considering.

The main issue is whether your supplier is installing in your area. The rollout has faced significant delays and setbacks. Last year it emerged that six of the country’s largest energy suppliers will pay £10m in penalties for failing to meet targets to install smart meters. Those ordered to pay-up include British Gas, OVO, E.On, Scottish Power and SSE. According to the Public Accounts Committee, the delayed smart energy meter rollout had missed its targets because ministers have not done enough to convince households of their benefits. Smart Energy GB is a not-for-profit organisation, funded by suppliers, to promote the benefits of smart meters.

Reports of faulty installations, inaccurate readings and meter malfunctions have damaged consumer confidence. Some customers have been massively overcharged without warning while others have been billed too little and ended up in debt to their provider. Nearly three million smart meters in Britain, about 10% of those installed, were not working properly in March 2023, data shows. A total of 2.7million of around 33 million meters are not in smart mode, according to figures from the Department of Energy and Net Zero (DESNZ).  In addition, millions more could be affected when the 2G and 3G mobile communications networks close, adds the DESNZ report.

First and second-generation meters

• SMETS1: Part of this problem is because the first generation of smart meters – SMETS1 – communicate with suppliers over the 3G network. It’s unlikely the new supplier will be able to pick up that communication and the meters installed may “go dumb” if households switch suppliers, so customer will need to take manual readings. “This means many consumers will face the choice between remaining with a more expensive tariff or losing the benefits of their smart meter,” reads a National Audit Office report in 2018. About 14 million of the 32 million smart meters installed across the United Kingdom so far are SMETS1 while the rest are  generation or SMETS2 meters. SMET1 are no longer fitted and there is an ongoing plan for a remote upgrade to those already installed. “This will allow them to get their smart mode back if it is lost when switching. Over time, all suppliers will be able to operate first-generation meters as smart meters,” says industry watchdog Ofgem. To date (March 2024), about 11 million SMETS1 meters have been upgraded to restore functionality.
• SMETS2: Households with a smart meter fitted in the last couple of years or on a waiting list, will have a second generation SMET2 meter. They are connected to a central data network to which all suppliers have access, so if they switch to a new supplier, the meter should not incur problems. The new supplier should be able to see household energy consumption and meter reading and the in-home display should show the costs. Smart meters need a signal to work. So, they are affected by everything from poor signals to power failures. Usually, remote readings are automatically sent to energy suppliers but if the meter loses connection, customers may be forced to rely on estimated bills.

The smart meter rollout was hugely ambitious. Despite billions being poured into the scheme, it faced delays amid a shortage of trained engineers to install them, technical glitches and bad publicity – leading to resistance from households. In a bid to meet targets and timescales, some suppliers began foisting the meters onto households who were wrongly told they had no choice. Nevertheless, there are significant benefits to a smart meter. Now, with sky-high energy prices, there are reportedly long waiting lists of people waiting to have one installed.

If you are looking for help with any electrical issues, you may find some of these services useful: