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How do smart meters work?

Fiona Leake
Fiona Leake
  | Edited by Fiona Leake
Updated 4th February 2021

Energy suppliers are moving away from traditional gas and electricity meters, replacing them with smart meters. Every British home will be offered a smart meter by June 2025. So, how do smart meters work and are there any downsides? Our in-depth guide covers everything you could ever need to know about smart meters.

What are smart meters?

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Smart meters are the next generation of traditional gas and electricity meters. Smart meters are self-reading which means your energy usage and how much money you are spending will be shown on the in-home display (IHD).

Smart meters can be a great way to control your energy usage. The IHD updates live, telling you how much you are using, which can be a great reminder to keep that number down by turning off standby appliances etc.

How do smart meters work?

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Smart meters work by automatically sending meter readings to your supplier. There won’t be any more estimated bills and you won’t have to take any meter readings. This makes smart meters an accurate way of measuring your energy usage.

Smart meters run using a secure national communication network (DCC). The DCC wirelessly sends meter readings to your supplier (keep reading to learn how). You will also be given an IHD with your smart meter which updates in real-time with your kilowatt-hour (kWh) usage and cost. 

Smart meters aim to give you more control over your energy consumption. They make life easier by providing accurate readings to your supplier, without you having to lift a finger.

Different types of smart meter

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There are two different models of smart meters. The second type is a new model that is beginning to replace the earlier model. 

  • SMETS 1 - the majority of people with smart meters have the first generation installed. SMETS 1 communicates with your supplier via a 3G network. This means that when you switch suppliers, they might not be able to pick up this communication. Your SMETS 1 will then just work as a basic meter and could lose functionality.
  • SMETS 2 - the second generation of smart meters rolled out in 2018, meaning if you’ve had a smart meter installed recently, it could be a SMETS 2 model. This updated model uses its own communications system via a central data network that all energy suppliers have access to. This means that when you switch, your new supplier will be able to access your meter readings.

The only way you can tell whether you have a SMETS 1 or 2 meter installed is to get in touch with your supplier who installed it. 

How to read a smart meter

The great thing about smart meters is that you’ll never have to take or send meter readings to your supplier. This is because the smart meter will automatically take and send these readings for you.

However, if you want to monitor your energy usage, you can. Select the ‘meter reading’ option from the menu on your IHD. 

Are smart meters compulsory?

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You don’t have to have a smart meter, the decision is up to you. By 2025, all suppliers will have to offer smart meters. However, you can decide whether to take this offer or not, it won’t be compulsory to have a smart meter installed. 

If your energy supplier is putting pressure on you to get a smart meter but you don’t want one, feel free to say no. Suppliers can sometimes forget to point out that it isn’t mandatory and many people get one thinking they have no say in the matter.

However, some of the best tariffs do require a smart meter to get the cheapest offer. This means that you’ll have to have one installed within an agreed timeframe or you could be placed on a more expensive tariff. This will all be explained in the T&Cs of the energy tariff. 

When replacing old faulty meters, energy suppliers will usually install a smart meter. They might be less willing to install traditional gas and electricity meters and you might have to discuss this with your supplier.

Are smart meters free?

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Smart meters don’t have any upfront costs and don’t charge an installation fee. However, they aren’t completely free as you’ll be paying for the cost of one through your energy bill. Taking into account the entire cost of the roll-out, it costs around £391 per average dual-fuel household, according to the National Audit Office.

So, it won’t cost you anything to have a smart meter installed but additional charges have already been added to all energy bills. Therefore, there won’t be extra charges added to your bill if you install a smart meter. Everyone is already paying on their energy bills, whether they choose to have a smart meter or not.

Which energy suppliers use smart meters?

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Most of the main UK energy suppliers are currently rolling out and offering smart meters:

  • British Gas - rolling out both SMETS 1 and SMETS 2.
  • Bristol Energy - SMETS1 for people who ‘urgently need one’. SMETS 2 will be out later this year.
  • Bulb - only rolling out SMETS 2.
  • Co-operative Energy - no longer rolling out SMETS 1 but have started rolling out SMETS 2.
  • Ecotricity - rolling out both SMETS 1 and SMETS 2.
  • EDF Energy - rolling out SMETS 2.
  • EON - rolling out SMETS 2.
  • Green Network Energy - rolling out SMETS 2.
  • Green Star - rolling out SMETS 2.
  • Igloo - asking customers if they want a SMETS 2.
  • Lumo - rolling out SMETS 2.
  • Nabuh Energy - rolling out SMETS 1.
  • Npower - rolling out SMETS 2.
  • Octopus Energy - rolling out SMETS 1 for people with additional needs. Have a manufacturing shortage of SMETS 2 and so have halted these for the time being.
  • OVO - rolling out SMETS 2.
  • Pure Planet - rolling out SMETS 2.
  • Scottish Power - have stopped SMETS 1 but are now rolling out SMETS 2.
  • Shell Energy - rolling out SMETS 2.
  • Simplicity - rolling out SMETS 1.
  • Spark Energy - rolling out SMETS 2.
  • SSE - have stopped SMETS 1 but are now rolling out SMETS 2.
  • Tonik Energy - rolling out SMETS 2.
  • Utilita - still rolling out SMETS 1.
  • Utility Warehouse - have stopped SMETS 1 but are now rolling out SMETS 2.

How can I get a smart meter?

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All households in the UK must be offered a smart meter by June 2025. This doesn’t mean that you’ll have a smart meter installed by this date but you will have been contacted and offered one by then. You can choose whether to have one installed.

Having said this, many households have the option to upgrade to a smart meter right now. However, your location and other factors can affect whether you are eligible for one yet. If you want to get a smart meter installed, you need to contact your energy supplier and ask for one, they will then tell you whether it’s possible or not. 

Am I eligible for a smart meter?

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The first step to find out whether your home is eligible for a smart meter is to contact your energy supplier. You can also ask which model they are offering, if they haven’t rolled out SMETS 2 yet, you might want to wait. SMETS 1 can run into issues when switching suppliers. 

Once you’ve found out whether you are eligible or not, you have the following options:

  • Wait your turn - suppliers tend to roll out smart meters area-by-area. This means you can wait until they contact you about your area, however, this could take months or years (up to 2025).
  • Jump the queue - you can contact your supplier to ask if you can get a smart meter installed now. If you can, they will arrange booking an engineer.
  • Switch energy suppliers - you could switch to an energy deal that requires smart meters, meaning you’ll get them installed when your new tariff begins.
  • Register interest - smart meters might not be available in your area yet. However, you can register your interest with your energy supplier, meaning they might prioritise your area in the next roll-out.

How smart meters are installed

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If you want a smart meter installed and your home is eligible, you can request one online or over the phone. Your supplier will then get in touch to arrange a date. The engineer will usually be from a third party that the supplier has a deal with. 

Once the engineer arrives the installation can take up to two hours, it’s usually one hour for the gas meter and one for the electricity. Your gas and electricity supply will need to be switched off during the installation. So, make sure that it’s a convenient time when most people in the house are out. 

After the meters have been fitted, the engineer should run you through how it works and how to use the in-home display. 

Ofgem requires suppliers to follow the Smart Metering Installation Code of Practice. This means that sales attempts during the installation are banned, they cannot offer other products or services. If you have given permission beforehand, they can attempt to sell. 

Will a smart meter save me money?

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Smart meters won’t magically start saving you money. However, the extra insights that smart meters provide in the form of the in-home display can help you start monitoring your energy usage. 

The in-home display that comes with a smart meter tells you how much energy you are using in real-time. It also tells you how much this energy is costing. This constant reminder will encourage people to turn off appliances on standby and only use the washing machine when you can fill it up. However, the information smart meters provide can only save you money if you act on it and change your energy habits.

Smart meters also provide much more accurate billing. This means your energy bills will no longer be an estimate and you won’t be overpaying for energy you haven’t used. 

Overall, smart meters can encourage you to make better energy decisions. The best tariffs also do tend to require a smart meter, meaning cheaper energy deals can be another benefit. However, smart meters won’t save you money unless you use the information they provide wisely. You are also already paying for the cost of smart meters on your energy bill.

Advantages of smart meters

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There are several advantages to smart meters, the main being the ease of use:

  • No more meter readings - smart meters automatically send out meter readings to your supplier. You won’t have to take and send them yourself.
  • Accurate bills - smart meters tell your supplier how much energy you are using. This means your bills won’t be estimates and you’ll pay for the energy you use. With regular meters, if you don’t supply a reading, your supplier will estimate your energy bill based on past figures. This leads to inaccurate bills and you’ll often overpay. This will be a thing of the past with smart meters!
  • Track your energy usage - the handy in-home display tells you how much energy you are using in real-time along with the cost. This encourages you to use less energy as you are constantly reminded of the cost which is great for budgeting!
  • Discover your faulty appliances - because smart meters track energy usage in real-time, you might notice a sudden spike when using a certain appliance. This will help you to identify faulty appliances and replace them with efficient alternatives.
  • Save the planet - smart meters are making the UK aware of its energy consumption. Changing our energy usage and investing in efficient appliances is great for the environment. Smart meters are also creating a smart grid, this is a low-carbon and efficient way of bringing energy to UK households.
  • Exclusive tariffs - smart meter exclusive tariffs tend to be the cheapest ones on offer. This means that you’ll be able to save money on your energy bills by having a smart meter installed and switching to a cheaper tariff.

Are smart meters dangerous?

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There has been some concern over the safety of smart meters due to waves they emit. The radio waves allow remote readings to be taken from the gas and electricity meters. The gov.uk website states that these radio waves pose no danger to health

The level of radiation is low and is below the agreed guidelines set by the International Commission on Non-Ionizing Radiation Protection (ICNIRP).

The installation of smart meters is also a very safe process:

  • All smart meters comply with UK and EU safety standards.
  • They are installed by trained engineers who have qualifications set out in the Smart Metering Installation Code of Practice.
  • During installation, the engineer will perform safety checks to identify risks with your gas appliances.

Disadvantages of smart meters

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There are a few disadvantages to smart meters that are worth mentioning before you decide whether to install one. 

  • Smart meters can go ‘dumb’ - if you have the first generation of smart meter (SMETS 1) it can lose its smart functionality once you switch. This means that the smart meter will still record your usage but it won’t be able to automatically send meter readings to your new supplier. 
  • In-home displays can become inaccurate - if you switch suppliers with a SMETS 1 meter, the in-home display should continue to show your usage. However, it’s ability to communicate with the smart meter might be inconsistent if you switch.
  • Poor signal - SMETS 1 smart meters rely on communicating via mobile networks. So, if your mobile phone sometimes loses signal, so will your smart meter. If you have a weak mobile signal, your smart meter won’t be able to send readings to your supplier. However, the vast majority of UK homes do have strong mobile signals and so this might not be a problem for many. 
  • Smart meters won’t reduce bills - whilst there is a correlation between reducing energy bills and having a smart meter, you will only save money if you take action and cut down your usage. Pay attention to the information your in-home display is giving you!
  • Data sharing - read the T&Cs when installing a smart meter. Your data collected by the smart meter might be offered to third parties to offer new products, services and marketing. Thanks to GDPR you do have to agree to this but make sure you read everything in full first. 

Are smart meters worth it?

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Smart meters can be worth it for many reasons, especially if you will pay attention to your in-home display. You can use the information provided to keep track of your energy usage and cut down your bills by using less energy. Smart meters also allow you to enjoy the benefits of accurate billing, you can sit back and relax without worrying about meter readings.

However, the first generation of smart meters (SMETS 1) can have many issues when you switch suppliers. The in-home display might not be as accurate and your meter readings might not be sent to the new supplier. These issues can put many people off switching which isn’t good as you can reduce your energy bills by switching to a better deal. Therefore, it’s best to get the newer SMETS 2 smart meters. You might have to wait for your supplier to roll these out but they don’t have any issues when you switch. 

Overall, smart meters can be useful for those looking to cut their energy usage. Just be aware that you’ll need to take action to cut your bills, smart meters won’t do it for you!

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