Smart meters

What are smart meters?

The display shows a householder’s gas consumption over the period of a week plus electricity usage using the traffic light system (green, amber, red – red indicating the highest electricity consumption)

Smart meters are the next generation of gas and electricity meters. They collect information about your energy use - electronically without the need for you or your energy supplier to take meter readings.   

The UK Government has decided that every home in England, Wales and Scotland should receive smart meters by 2019. Around 26 million homes (plus smaller non-domestic premises) will be fitted with smart gas and electricity meters over the next seven years.

 Smart meters are part of an EU programme which will see all member states rolling out ‘intelligent  metering systems’ to at least 80 per cent of domestic electricity consumers following an assessment of costs and benefits; and to consider the cost and timetable for installing intelligent gas metering.

Looking forward, smart meters will be an important part of ‘smart grids’, which are being planned to help manage supply and demand across the electricity system and allow the maximum use of low carbon technologies. 

The benefits of smart meters

The benefits of a smart meter are:

• no more meter readings – your energy supplier will receive regular information on energy usage automatically without visiting your home, and without you having to report your own meter reading
• more accurate bills - your bill will always be based on the exact energy you use, not on an estimate
• keep track of the energy you use – smart meters will be accompanied by an in-home display, which will enable you to see how much energy is being used in your home in real time.

In addition, the UK Government says that at a minimum, every display will be required to provide information on:

• current and historical electricity and gas consumption
• usage in pounds and pence as well as kilowatts and kilowatt hours
• ambient feedback that allows consumers to easily distinguish between high and low levels of current consumption
• account balances.

The introduction of smart meters also offers other potential benefits. They will help you save money by enabling you to use energy at ‘off-peak’ times, when demand for electricity is lower and it is cheaper.  The UK Government expects the roll-out of smart meters to result in:

• a wider range of tariffs
• an initial increase in energy costs of £6 by 2015 followed by a decrease in energy costs of £23 by 2020 provided consumers change their energy use in line with UK Government’s estimates.

According to DECC you will not be charged separately for a smart meter or for the in-home display. Under current arrangements you pay for the cost of your meter and its maintenance through your energy bills, and this will be the same for a smart meter.

Energy suppliers may also offer other services to enable you to track your energy usage, for example online accounts or through mobile phone applications. Customers on pre-payment meters may also benefit from new and easier ways of topping up the meter without leaving home.

Feed-in Tariffs

 Iskra import-export smart meter

The introduction of smart meters will bring to an end the deeming (at 50%) of electricity generated by householders from microgeneration technologies such as solar PV (as part of the Feed-in Tariff) as they will work as both an import and export meter. Once smart meters are installed you will get paid for exactly every unit of electricity you export. As an additional benefit a smart meter should enable you to receive, store and communicate the total amount of electricity generated from any microgeneration technology you have installed.

How can a smart meter help save energy?

When installing the meter, your energy suppliers will advise you how to use it to save money by managing your energy consumption better by changing habits and cutting down waste. You will be able to see instantly when you're using lots of energy - and how much it's costing you

A pilot in England, Scotland and Wales of 50,000 self-selecting households with smart meters which ran from 2006 to 2011 showed reductions in demand for energy between 2 and 4%. However, a report from the UK’s National Audit Office of 30th June 2011 identified “uncertainty, based on the evidence available so far, about the extent to which smart meters will result in changed energy use by consumers over a sustained period”.  Read the report of the National Audit Office of 30th June 2011 at the NAO website. 

When will I get a smart meter?

The full rollout of smart meters by all energy suppliers is likely to start towards the end of 2014. It will then take until 2019 for energy suppliers to provide all their customers with smart meters. Some suppliers may be willing to respond to requests for smart meters; others may work through areas one at a time. Some energy suppliers including British Gas have already started installing smart meters. The UK Government's advice is: "If you are interested in getting a smart meter now, you should shop around and contact different energy companies to see what their plans are.” Here is our summary of what the big six energy companies have done:

It is worth nothing that the UK Government’s technical specification for smart meters is not due to be finalised until the end of 2012. This means that there is a risk that some of the smart meters already been installed or due to be installed between now and 2012 will not comply with this technical specification (for example, they may not have the capacity to act as an export as well as an import meter). The UK Government is currently consulting with the energy suppliers about how to deal with this issue. We suggest that you discuss this with your energy supplier before having a smart meter installed now. The worst case scenario is that your energy supplier will have to fit a replacement smart meter in your home (at their cost) before the end of 2019.

Find out more

Answers to frequently asked questions about smart meters at the DECC website. 

 Read the full National Audit Office Report on Preparations for the roll-out of Smart Meters at the NAO website.

Download the Ofgem factsheet Smart metering - what it means for Britain’s homes from Ofgem's website.