What is a smart meter?

A smart meter is an energy meter that measures how much gas and electricity you're using and gives you the information in near real-time. Smart meters automatically send the information directly to your energy provider. This means you’ll always get accurate bills. 

You can also monitor your energy consumption data through a digital display in your home. 

There are two key components of smart meters:

1. The meter — This is installed in place of a traditional gas or electricity meter and works in the same way: by measuring how much energy you use at home. It records the information digitally and transmits the data to your energy provider.

2. The smart display — The smart display, or in-home display (IHD), is a separate device that communicates wirelessly with your meter. It can show you how much energy you’ve used and how much it will cost. The display is usually a small, portable digital screen that you can place or move around your home.

How does a smart meter work?

Through the Data Communications Company (DCC), smart meters use a secure wireless network to automatically send energy usage data to your provider. As they use their own network, they transmit the data without having to tap into your home internet connection.

Once installed, the smart meter measures your energy consumption and sends regular updates to your provider. 

The smart meter also relays the information to your in-home display, giving you an accurate idea of your usage at that moment.

What are the benefits of smart meters?

• Monitor your usage in real-time

One of the biggest advantages of smart meters is being able to see exactly how much energy you’re using, as you’re using it, and how much it’ll cost.

Previously, it was nearly impossible to see what was causing energy usage spikes, but smart meters can now tell you how much energy a certain appliance may be using.  

• Get more accurate bills

Gone are the days of estimated bills and meter readings. Smart meters automatically inform suppliers of your usage, meaning you don’t need to take manual readings or have engineers round to check meters. You’ll receive bills based on your actual consumption rather than estimates, so you can be sure you’re paying for your usage and nothing else. 

• Adjust your usage to reduce your bill

Understanding your energy patterns better can help you identify areas where you can cut back to save on your bills. For instance, appliances left on standby mode when not in use could be slowly driving up your bill – but being able to identify this with real-time insights can help you make a more conscious decision to switch off and unplug electronics that are using electricity.

This insight allows you to make decisions about how to use less energy during peak times, which can lead to lower energy costs.

• No more manual meter readings

Smart meters automatically send your energy usage data to your provider, removing the inconvenience of taking manual meter readings. This means you no longer have to submit readings yourself (unless you want to, of course!) or have someone come to your home to read the meter.

• Set usage limits

Many smart meters allow you to set daily or monthly energy usage targets. The in-home display can alert you when you’re nearing these limits, helping you stay within a budget and manage your energy consumption more effectively.

• Prepayment friendly

Prepayment customers can sometimes be left behind when the energy industry advances, but smart meters are something they can take advantage of –  knowing how much energy you have left on your meter is crucial, and the displays will show how much credit you have left. 

And now, with smart technology, you can top up your balance from your phone or computer. No more traipsing down to a pay point. You can add credit easily and be sure you’re never in danger of running out at any time. 

• Supporting smarter grids

As Britain moves toward a smart grid and utilising new technologies and ways to deliver energy, smart meters will sit at the centre of this. Two-way communication between consumers and the energy grid will allow for smarter, real-time responses to energy demand.

What are the disadvantages of smart meters?

Smart meters offer plenty of benefits, but there are a few things to consider before deciding to make the switch. Here are the key points to understand when it comes to smart meter drawbacks:

• First-generation smart meters (SMETS1) may need reconnecting or replacing — Early models of smart meters, known as SMETS1, sometimes lose smart functionality when you switch energy providers. They might need to be reconnected or even replaced if they can’t be updated remotely. The good news is that this problem is slowly going away, thanks to the DCC enrolling these meters into the smart network.
  

• Switching to a smart meter requires professional installation — If you choose to upgrade to a smart meter, it’ll need to be installed by a professional technician to make sure it’s fitted and configured correctly.

What does a smart meter look like?

Recently moved, and not sure if you have a smart meter or not? You’re not alone.

Smart meters tend to look pretty similar to traditional gas or electricity meters. The key difference is that they’ll often have a digital display with buttons that let you scroll through the features.

You can also check if you have a smart meter by using the Citizens Advice tool:

• For residents in England and Wales

• For residents in Scotland

Do I have to have a smart meter?

No, you don’t have to have a smart meter installed, as they’re not compulsory. You also have the right to refuse the installation of a smart meter in your home if your energy supplier offers you one. However, this might mean you can’t purchase certain energy tariffs, like time-of-use tariffs.

While having a smart meter installed isn’t mandatory for households across the country, the UK Government has set goals for energy suppliers to install smart meters in at least 74.5% of homes and nearly 69% of small businesses by the end of 2025. Energy firms must take “all reasonable steps” to fit smart meters for customers if they’re replacing a traditional meter or installing one for the first time (like in a new-build property).