UK smart meter guide: How they work and do you need one?

You’ll most likely have noticed an increase in the number of texts, phone calls and letters your gas and electricity supply have been sending you, trying to get you to upgrade to smart meters. They’ve been around for years now, but is the technology mature enough and the benefits big enough to make upgrading worthwhile?

The answer is, annoyingly, still not that simple.

Although smart meters have proved popular in the US, things in the UK haven’t been entirely plain sailing, with the use of out-of-date technology, high costs, and ever-slipping targets all getting in the way.

And, that’s before you get into the usual press accusations of Big Brother-style spying, and the risk of billing catastrophes all levelled at smart meters.

The result of all this is that as of the end of June 2024, the UK had rolled out a total of 36.2 million smart and advanced meters, around 63% of the total market.

Confusingly, only 32.7 million of these smart meters are operating in smart mode, adding another layer of confusion to the mix.

However, despite the mixed messaging there are potential energy savings, with Smart Energy GB, the independent body promoting smart meters, stating that people can save up to 15% on their bills by upgrading their meter.

But what is a smart meter, how do they work and do you want one? Read on to find out.

What is a smart meter?

Smart meters are connected meters that are designed to replace the electricity and gas meters that have been living in cupboards under the stairs for decades.

They do exactly the same jobs as those older ones, but they also send meter readings direct to your energy suppliers without anyone having to come round and look at them.

This is a good thing because you don’t need to let a stranger into your home, you don’t need to do any readings yourself and your supplier can bill you on how much gas and electric you’ve actually used rather than make estimates.

Now, it may be that you’re still billed according to monthly averages of your total annual consumption, to average out costs so that you don’t end up with high bills in winter months and lower costs in summer months, but your plan should be fairer and closer to actual usage.

Now, as well as your supplier, your smart meter is also wirelessly connected to a little in-home display (IHD) which you have sitting around on the sideboard somewhere. That’s designed to give householders meaningful representations of their energy consumption in real-time.

So, as well as the slightly impenetrable kWh measurements, it’ll also display how much you’ve used in pounds and pence as well as your live rate of consumption, again, in pounds and pence. The idea is that you can see how and when you use the most energy at home and, hopefully, it’ll bring in a few truths about how much energy you waste from leaving lights on, taking that extra long shower or repeatedly boiling the kettle.

You get the picture – or at least you will once you’ve had a smart meter installed. Once we’re all getting a better idea of how much energy we’re using, our homes can be made more energy-efficient (so the theory goes), and that’s good for the environment.

They can even help you to save money as most models, like E.On’s shown below, let you set daily and weekly budgets for your gas and electric.

Do you have to have a smart meter?

Take-up is not compulsory, although you’ll undoubtedly have been offered one by your energy supplier. There are no plans to make smart meters compulsory, although energy providers were originally given roll-out targets in mid-2021, with an aim to get 85% of homes to have one by 2024.

As mentioned above, half way through 2024 and there’s still a significant shortfall here.

That’s why, in late 2023 the targets were adjusted for suppliers to install smart meters in at least 74.5% of the homes they supply.

We’re told that providers are currently installing around 80,000 to 85,000 smart meters a week.

You’ll be able to hold on to your existing smart meter while it works, but new properties should have a smart meter installed, and replacement meters should also be smart.

Getting a smart meter doesn’t cost anything, and they don’t change the way that your home works, so there’s no reason to fear getting one.

How do I get a smart meter?

Every energy supplier should now be offering smart meters, although they won’t all necessarily push you to have one.

If you really want a smart meter, you can phone your energy provider and ask them to install one, or register your interest on the relevant page of their website.

Typically, from experience, providers will target areas and target customers that live there first.

Are there Economy 7 and prepay smart meters?

Two-tariff, such as Economy 7, and prepay smart meters are indeed available, from a growing number of sources, which could be a real bonus for these users.

If you’re a prepay customer, you’ll get a mobile app, complete with warning notifications when you’re running low, where you’ll be to top-up instead of having to head to the petrol station to stick some more credit on your plastic key.

Those with a two-tariff meter will benefit because they’ll actually be able to make sense of the system and see at a glance which tariff they’re set to use at any given moment. In fact, smart meters may well give rise to a few more innovative multi-tariff packages once the energy companies get a better idea of our usage through all this live data.

Which smart meter should I choose?

You’re not likely to get much smart meter or in-home display (IHD) choice from your provider and, really, don’t waste your time thinking about it. They’re all very similar and pretty much all do the same things.

All the IHDs seem to come with a warning light that turns from green to amber and red depending on how decadent you’re being with your waffle iron.

They all have an AC mode as well as back up batteries, they all allow you to set budgets for how much you’d like to spend on energy each day – and then get notifications when you find you’ve gone way over what you’d intended – and they all including a reading of all the CO2 emissions you’ve been responsible for. Fun.

Like we say, though, don’t sweat it. As far as we’re concerned, none of these IHDs are either good or bad enough to make or break your choice of getting a smart meter with any provider, and they all look very similar and offer very similar functionality.

You’ll likely be doing all of this through your mobile phone in a year or two anyway.

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

One of the big problems with the initial roll-out was that the first set of smart meters used the Smart Metering Equipment Technical Specifications 1 (SMETS1) standard. With these meters, you could switch energy providers but doing so would kill the smart connection and turn them back into dumb meters. The later SMETS2 standard fixed this, making switching easy without losing any features.

Since March 2019, SMETS1 meters have not counted towards an energy provider’s installation target, so it’s very likely that if you get a smart meter today it will be the newer SMETS2 type.

It’s not all bad news for SMETS1 meter owners though. All new SMETS2 smart meters are built to work on the standardised national network run by Smart DCC (Data Communications Company).

Older SMETS1 meters can be upgraded to run on the DCC network, too, restoring functionality to them. In effect, once connected to the DCC network, there’s no practical difference between having a SMETS1 or SMETS2 meter.

If you have a SMETS1 smart meter that hasn’t been upgraded to work with the DCC network, switching providers may result in a period where your smart features don’t work, requiring you to manually read your meters for a while.

However, your old meter should be upgraded to work with your new provider and you should push for a replacement SMETS2 meter if this isn’t possible.

IHDs will work when you switch providers, although it’s important that they get an over-the-air update to reflect your new tariff, so you see the correct pricing information on-screen.

There are some cases where IHDs have communication problems with SMETS1 meters after switching suppliers, although the smart meters will communicate properly with the energy provider.

The cases for and against smart meters

SMETS issues aside, which should have ironed themselves out by now, there’s really not any drawbacks to having a smart meter installed as we approach 2025.

Giving you more information about how you use power and making bills more accurate are reasons enough to upgrade, especially with energy prices at record highs.

Most of the negatives that you read about smart meters are false or only have a grain of truth about them. We’ll run through some of them here.

First, some people have said that smart meters have communication problems. The first generation of smart meters used mobile networks to communicate, which could cause communication problems in some areas.

With the new DCC network, coverage is over 99% of UK premises. So, there will be some remote areas that won’t work with smart meters, but they’ll be in the minority.

Although, new stories in late 2024 highlighted that there have been signal issues when it comes to the reporting of data from smart meters.

The BBC reported that people in the North of the country could be having to submit manual readings and receiving estimated bills, as a result of longer-range radio frequencies being used.

Probably the biggest scare story about smart meters is the claim that they give off intense bursts of microwaves, which can cause cancer.

We’re certainly not arguing that intense microwave radiation doesn’t cause cancer, but according to Public Health England, British Gas and others, the levels of radiation from smart meters are very, very low; lower than those from your mobile phones and tablets and not really any different to the Wi-Fi network that you probably already have in your home. So, that’s that one.

There are also worries over the potential for smart meters to be hacked – though the latest upgrades to these boxes mean your data should be very secure indeed. Hackers are more likely to go after major country-wide systems rather than the box sitting in your living room measuring how much electricity you’re using. You shouldn’t have any worries on this score either.

Privacy is another issue to think about: you need to be comfortable with the idea that a smart meter will give your energy provider access to your gas and electricity usage data.

As it stands, your supplier will be able to access your daily energy use – unless you object – but they need your permission for the up-to-date info and they need your permission to use your data for marketing and if they want to sell it on to third parties. So, it’s probably worth while digging your heels in on that one. There’s more info from OFGEM here.

Of course when it comes to switching, your half-hourly energy usage data could come in very handy when you want to find a provider that’s going to cost you the least with the most suitable tariff for your usage patterns. So it works both ways on this one.

The other “scandal” when it comes to the roll-out is the sheer cost. In case you missed it, public cash isn’t exactly in plentiful supply. The smart meter revolution looks like it will cost more than the £13.5 billion estimated, at the latest count… which is obviously no small sum.

Some people will frame that as wanton overspending, but others would counter that you can’t expect to get efficient energy usage countrywide without backing the scheme with money.

As for costing you more yourself, there’s no evidence to suggest that smart meters will charge you more for your gas and electricity usage. There have been one or two instances of mistakes where customers have been charged a small fortune but, obviously, these people never had to pay a penny for such glitches.

There’s a hidden cost that we’re all already paying because the rates have gone up a touch to cover the cost of these so-called free installations, but there’s not much you can do about that. You’ll pay whether you choose to go smart or not.

Smart Meter FAQs