Everything you need to know about smart meters

A couple look at an energy bill with a smart meter in the foreground and electricity hitting it (images: Getty Images)

UK households are currently in the process of being moved over to energy smart meters. Here’s everything you need to know.

Suppliers have been legally bound to meet a Government target of ensuring around 75% of homes have one by the end of 2025. Failure to do so could land them with a fine from Ofgem. While the targets are an environmental policy first and foremost, getting a smart meter also means you’ll have more ways to save money. 

Several types of tariff require you to have one, including most of the top energy deals currently available on the market. They can also help you see where you can save money on your energy use – see our energy saving top tips guide for more – and provide suppliers with more accurate readings.

More recently, smart meters have been essential for new and experimental energy money saving schemes. These include the Demand Flexibility Service and Octopus’s Agile and Tracker tariffs.

So, how exactly do smart meters work – and how can they help you with your energy bills? We’ve taken a look at everything you need to know.

How do smart meters work?

Smart meters track your energy use, and then share that information directly with the energy supplier.

With traditional meters, suppliers rely on us to inform them of how much energy we are using by submitted readings every month, either ourselves or by letting a representative of the supplier check the meter in our home.

It’s only through those readings that suppliers can give us accurate bills ‒ otherwise they effectively have to guess, which can mean you end up with inaccurate and costly bills.

Smart meters cut this issue out, since the information is transmitted directly to the energy supplier using a national network. This information is sent wirelessly, so you don’t need to do anything to ensure your energy company has the data they need.

Reading meter when moving house to send details to energy supplier

How can smart meters save me money?

Smart meters can help households use energy more efficiently, saving money in the process – see how to cut energy costsWhen you have a smart meter installed, you are provided with an in-home display which shows you how much energy you are using.

Gas and electricity meters are often installed in hard-to-reach places within the home. You may have a meter under the stairs or at the back of a cupboard, for example. If so, you’re unlikely to go to the trouble of checking the meter regularly to monitor your energy consumption, but smart meters mean you can track that usage more easily.

The smart meter will detail your energy use in pounds and pence, and having that information can help you make lifestyle changes which will reduce your energy bills. For example, if you can track how much it costs to boil a full kettle then that may prompt you to only boil as much as you need for each individual cup of tea.

Similarly, being able to see how much that dishwasher cycle costs may prompt you to replace your old unit with a more energy efficient one.

So, while the smart meter itself won’t directly save you money, it can give you the information needed to make money-saving changes.

Where having a smart meter installed will in itself save you cash is by allowing you to access schemes, such as the National Grid ESO’s Demand Flexibility Service. The suppliers taking part require you to have a smart meter to get involved. The following schemes are running this winter:

These all offer credit or other discounts to people who can cut back on their energy use at peak times. If you take part, you’ll be measured using half-hourly meter readings. 

smart meter

What energy tariffs can I get with a smart meter?

Having a smart meter means you have more energy tariff options – see how to do an energy comparison to find the cheapest gas and electricity deals and Should I fix my energy? for what you need to know if thinking about switching right now.

Some energy suppliers will only offer certain tariffs to households if they have a smart meter. As a result you may qualify for a cheaper tariff by having a smart meter. For example, all the EV tariffs currently available on the market need you to have a smart meter. If you have an EV, you could save £100s with this kind of tariff.

You can have a smart meter even if you are on a prepayment tariff, rather than one paid by direct debit each month.

Do I have to have a smart meter?

You do not have to accept having a smart meter installed if you do not want one. While energy suppliers have been given targets related to encouraging more households to have smart meters installed, they are not compulsory. 

However, if your existing meter needs to be replaced then you may be obliged to have a smart meter, though Citizens Advice explains that you can request to have the ‘smart’ functionality turned off.

Are smart meters free?

You do not have to pay to have a smart meter installed. The energy supplier will arrange the installation for you, and there is no additional cost to worry about.

If you want one and you live in rented accommodation, be sure to get your landlord’s permission before you book a smart meter appointment.

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

Yes, you can switch gas and electricity suppliers if you have a smart meter, though you may need to change the meter you have.

The rollout of smart meters has been going on for some time, and so early adopters of the technology will have first generation smart meters, also known as SMETS1. With these meters, if you switch supplier then you may lose the smart functionality, effectively turning them back into a standard energy meter. While the in-house display will still work, the information won’t be shared with your supplier.

However, there are no such issues with the second generation of smart meters, or SMETS2. These meters will continue to work properly if you switch suppliers.

The best way to establish what sort of smart meter you have is to speak to your energy supplier. Suppliers plan to update the old meters though you may have to wait for this to happen.

Radiator with heating on low, with two hands on it

Are smart meters safe?

Smart meters are perfectly safe. Smart meters use radio waves to take remote readings from our gas and electricity meters, and tests by the UK Health Security Agency found that these radio waves do not pose any health risks.

This has been supported by similar assessments in other countries where the technology has been rolled out.

The pros of smart meters

Accurate bills: With a smart meter, you will only pay for the energy you use

No manual readings: You don’t have to submit a meter reading, or allow an energy supplier rep into your home to do it

You are better informed about your energy use: The in-home display means you can keep track of the energy you are using, and what it costs, allowing you to make money-saving changes.

More choice of tariffs: You can take advantage of smart meter exclusive tariffs as well as other money-saving schemes that are only available to homes with smart meters. See the latest fixed deals

The cons of smart meters

Smart meters going ‘dumb’: If you have an old smart meter then you risk it going ‘dumb’ by switching supplier

Feeling watched: Not everyone likes the idea of information about their energy use being sent directly to their supplier

Feeling pressured: With money tight, seeing the cost of your energy use in real time could pressure you into turning the heating off during the winter in order to save money when you really need it on.

Technical issues. Many report problems with smart meters and providers being slow to fix the issues.