Smart meters are the new way of tracking and reporting a household's energy usage. They're being rolled out across the UK - although not as quickly as planned.
The ambition behind the new meters is simple: reduce inaccurate bills and keep a closer eye on how much energy is being used.
Although most people who get smart meters seem happy enough with the experience, there are some doubts about whether the devices are worth it.
What are smart meters?
Smart meters are a replacement for traditional gas and electricity meters.
They keep track of energy usage and automatically send meter readings to energy suppliers.
They also come with an in-home display (IHD) that allows people to see how much energy they're using - both in kW and in pounds and pence.
Do I have to get a smart meter?
People are not under a legal obligation to have a smart meter fitted.
However, energy companies will try to install the meters in all their customers' homes. They have to take all reasonable steps to tell everyone about the smart meters and will be keen to meet targets.
After 27% fewer smart meters were installed in homes in 2020 compared to 2019 because of the impact of the coronavirus pandemic, regulator Ofgem has set binding targets for annual installations from January 2022.
This is designed to meet the Government's target of rolling smart meters out nationwide by the end of 2025, so it means most of us are going to be asked soon - and repeatedly - have a meter fitted.
Many providers are now only offering their cheapest tariffs to customers with smart meters or on the basis the customer agrees to have a smart meter installed. It's something to be aware of if you're looking to switch to a cheaper deal.
If a customer feels they are being unfairly pressured into having a smart meter fitted by their supplier, they can call the Citizens Advice consumer helpline on 0808 223 1133 for advice.
Two generations
There are two types of smart meter: SMETS1 and SMETS2.
The main difference between the two generations is that SMETS1 communicates with suppliers over the 3G network. SMETS2 has its own central network.
SMETS1 devices cause lots of issues when households switch energy suppliers. The meters can 'go dumb' and lose functionality, as the new supplier can't pick up the 3G communication.
SMETS2 is also far more secure than its predecessor, as the new communications network is closed and can't be accessed through the internet.
The newer devices are fast replacing the outdated ones, with 194,000 SMETS2 meters installed in January 2020, compared to 26,000 SMETS1 meters.
However, although the end date for installing SMETS1 was 15 March 2019, that just means providers can't count the older devices towards their targets - they might still want to install leftover SMETS1 stock. So be sure to check.
Plus, it's worth noting not all energy companies accept Ofgem's rationale on giving up on SMETS1 meters.
Utilita were threatened with enforcement action for continuing to install SMETS1 meters, but the supplier argued against this and say functionality is not lost when a meter is changed.
Ofgem eventually withdrew the threat of action against Utilita, but said in January 2021 that it would be kept under review, so this may be a debate that refuses to end for some time yet.
Will my SMETS1 meter have to be replaced?
Maybe.
The Government and the energy companies have agreed to work on technology to migrate the old SMETS1 meters over to the DCC, but not every model will be able to migrate. You can see a list of upgradable models here.
It could be that energy companies prioritise smart meters for new customers to encourage uptake or they may focus on upgrading existing smart meters for customers who are already receptive to the idea of having one in their home.
Smart meter rollout
The Government says that smart meters will be standard in the UK by the end of 2025. They're aiming for a minimum of 85% coverage for each supplier's customers.
The initial target was 2020, but several things slowed the rollout:
- The IT system underpinning the rollout was repeatedly delayed
- Problems with the SMETS1 modes (including the 'going dumb' problem mentioned above) meaning a change of direction partway through the rollout
- Installations targets were possibly unrealistic - the Government wanted 50 million smart meters installed from 2011 to 2020, but only 13.5 million had been installed by April 2019
After the deadline of 2020 was missed, a further target of 2024 was set.
Then, following the effect of the coronavirus pandemic on installations, the deadline was moved into the middle of 2025. It has now been moved again to the end of 2025.
Data from ElectraLink found a 34% uptick in installations in March 2021 compared to the previous month and the milestone of 16 million installations was hit in July 2021.
So, the rollout continues apace, and it should reach most of us in the next few years.
Which energy suppliers are installing them?
From January 2022, all of them must be installing new smart meters to meet Ofgem targets.
Each supplier will need to published annual targets on their websites and then re-set them the following year based on how many of their customers do not have a smart meter.
As we saw with the case of Utilita mentioned above, Ofgem are not shy about public arguments with suppliers over their commitment to smart meter installations.
In the past, we've seen suppliers like Avro Energy banned from taking on new customers until they got their rollout in order.
There's no way of avoiding the smart meter rollout simply by choosing a specific supplier - all energy companies are required to hit their targets and will be aggressively pursuing them.
How do I get a smart meter installed?
Although smart meters should be offered to us all over the next few years, there are a few things to know about the rollout and why it's taking some time.
Who can get a smart meter?
Most people can theoretically get a new smart meter, but:
- Some homes are in areas with poor signal, meaning they can't get onto the DCC network. The network is being improved, so hopefully this will stop eventually. If a supplier says they can't install a smart meter for signal reasons, ask to be put on a contact list for when signal improves in the area.
- Some suppliers won't install smart meters for Economy 7 customers.
Prepay plans
Most people on PAYG plans will be able to get smart meters. In fact, the new technology has the potential to be particularly beneficial to those who prepay for energy.
First, it simplifies topping up. Physical keys or coins aren't necessary, as most suppliers are tying in online PAYG options with their smart meters.
Second, it means households can keep a close watch on how much energy allowance they have left. No more surprises.
Requesting a smart meter
Many of the biggest energy suppliers including British Gas, E.on, EDF, Ovo, Scottish Power and Shell Energy say they're installing smart meters across the country. That means customers should be able to request a smart meter and get it installed within weeks.
Some smaller suppliers, like Octopus Energy, are working on upgrades region by region. Customers will have to wait until the suppliers get to their area. Most suppliers will contact their customers in each region, but it's a good idea to get ahead of the game by asking to be put on the waiting list.
Bulb also raises a further issue for eligibility for their website: the signal strength we mentioned above as a potential pitfall.
When a customer requests a smart meter, if the signal in their area isn't good enough, Bulb will wait until the installation is more likely to be a success. This can be frustrating for customers, but it's obviously better if the installation works first time.
Pros and cons
Smart meters have proved controversial. This is largely down to the repeated delays in roll-out, and the big costs to suppliers that trickle down to customers.
But a 2019 report from The Campaign for a Smarter Britain suggested that 76% of people with smart meters would recommend the devices to their friends.
So, they must be doing some good - how do the benefits and concerns weigh up?
Smart meter benefits
Accurate bills
Estimated bills are used when a customer doesn't send regular meter readings to their energy supplier. The supplier looks at previous usage and works out what the customer was likely to have used in the last billing period.
Sometimes that figure can be off, leading to startling bills.
Smart meters send readings automatically, meaning there's no need for guesses. What's used is what's billed for.
Easier top-ups
PAYG customers can top up through smart meter-connected apps. A Government survey showed that prepay energy users found the smart meter particularly useful, with many using the app as their primary top-up method.
Tracking energy usage
Being able to see how much energy is used in a household, in real time, is a great tool for people who want to save money or live in a more environmentally friendly way.
Some suppliers also offer online tools and apps that work with the smart meter. These should become more sophisticated as time goes on - hopefully including the ability to analyse trends in energy usage.
Again, energy tracking has proved most useful for PAYG customers. The hard limit of a prepaid energy allowance motivates people to keep a closer eye on their IHD, which heightens the benefits of having a smart meter and thus saves more money.
Concerns about smart meters
They don't save much money
This is the most common complaint - and probably the most valid.
Even the most optimistic Government estimates were hardly life changing. Initially, smart meters were predicted to save £26 per household per year, (rising to £47 by 2030).
Even that modest prediction was too high, though, and was revised to £11 per year in 2018.
Although customers can see their energy use, which does help with reducing use in the short-term, once the novelty wears off it appears that most people go back to their old ways.
Moreover, the cost to energy suppliers - enormous over the rollout - is being passed onto customers, meaning bill rises are partly down to this initiative.
On an individual level, households committed to reducing energy usage should still find the smart meters a great money saver. But looking at the country as a whole, the impact won't be massive - certainly not to start with.
Energy suppliers cutting off supplies remotely
In theory, energy suppliers can disconnect and reconnect gas and electricity using a smart meter.
However, no suppliers appear to be doing this. They are concerned about risks to customers: accidentally cutting off energy to someone who relies on it for medical equipment; or reconnecting it when a customer has left hair straighteners plugged in, or the stove on.
Privacy problems
Smart meters take readings very frequently - every half-an-hour or so.
That means the data collected can build up a detailed picture of the household, including when they are likely to be in or out of the house. Data breaches could therefore be dangerous to customers.
However, the new dedicated network seriously reduces chances of such a breach, and Ofgem is on the backs of energy suppliers to make sure data is kept strictly private.
Conclusion: the future of energy?
The Government is committed to getting smart meters installed in as many homes as possible. Some version of smart meter is almost certainly going to be the standard way of recording and reporting household energy in the future.
For most people, a smart meter is not going to be a game changer. Some households will save lots of money, some won't save any. The main factor is how much attention is paid to the IHD - and therefore energy usage.
Environmentally, many households will be happy of the chance to monitor and reduce their energy usage.
Money-wise, switching suppliers is likely to make a much bigger impact. Read our guide on how to do that. Switching tariffs is another potential source of savings - read more here.
Our free-to-use comparison tool can help you compare energy prices for your household based on individual usage.
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