What is a smart meter and how does it work?

A smart meter is a new kind of gas and electricity meter that can digitally send meter readings to your energy supplier. This can ensure more accurate energy bills. Smart meters also come with monitors, so you can better understand your energy usage. Every home in Britain will have a smart meter installed by 2020. 

Smart meters are a next generation meter for both gas and electricity. They are a replacement for your existing meters, which still use technology created decades ago.

Smart meters use a secure national communication network (called the DCC) to automatically and wirelessly send your actual energy usage to your supplier. This means households will no longer rely on estimated energy bills, have to provide their own regular readings, or have meter readers come into their homes to read the meter.

Smart meters will also come with an in-home display.

This display gives the household real-time usage info, including kWh use and cost.

What are the benefits of having a smart meter?

There are several benefits to smart meters:

• More accurate bills Smart meters mean the end of estimated bills, the end of having to remember to provide meter readings and/or have a stranger come into your home to read your meter
• Better understanding of your usage With the smart meter display, you can see the direct impact your habits and lifestyle have on your bill. This is particularly useful to prepayment meter customers, who can better track how their usage impacts their available credit. By making your energy usage easier to understand, you can make smarter decisions to save energy and money, including feeling more confident switching energy suppliers.
• Faster and easier energy switching Because your usage data is so easily accessible, the aim is to make energy switching as quick as just a half hour.
• Bringing Britain’s energy system into the 21st century The future is smart, and smart meters are part of the effort to create a smart grid, which is part of providing low-carbon, efficient and reliable energy to Britain’s households.
• Innovative energy tariffs Using the data collected on when and how households are using energy, suppliers can create more competitive time-of-use tariffs with cheaper prices for off-peak use.

How much does it cost?

Nothing. Your smart meter will be installed by your energy supplier at no charge to you. The cost of the roll out is covered already in your energy bill – the same way that installation and maintenance of traditional meters is.

Can I switch supplier if I have a smart meter?

Yes. Ofgem has created regulations to ensure that smart meters do not present an obstacle to consumers wanting to switch suppliers.

Should a consumer have a smart meter installed and wish to switch to a supplier not yet supporting the technology, the new supplier is obligated to take on the customer, and the smart meter will revert to ‘dumb’ mode. But this is only temporary, until the DCC launches.

Also, if your meter does temporarily revert to its non-smart mode, you can still benefit from the in-home display, which will continue to show you your usage in real time (but will not calculate that into pounds and pence until it is back in smart mode).