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Smart meters explained

What is a smart meter?

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What is a smart meter?

Find out more about smart meters - from what they do and whether they will save you money. Plus do smart meters give off radiation? 

Smart meters give both you and your energy provider accurate and regular updates on how much electricity and gas you use.

Like traditional gas and electricity meters, smart meters measure your energy use. The main difference is that they automatically send your usage information through mobile networks to your supplier.

Your smart meter will come with an in-home display (IHD), which will show you how much energy you use in real time, and how much it's costing. You may also be able to get this information through your online account with your energy company, or its app. By giving you this information, smart meters should help you to better control your energy use.

Here, we explain exactly what smart meters are, how they work, whether they're mandatory, how you can get a smart meter, and whether getting one installed will save you money.

Click a question below to jump straight to the answer, or read on to get the full picture. Find out if your energy company is installing yet in our smart meter roll-out guide.

How do smart meters work 

Smart meters replace your existing gas and electricity meters. They use wireless networks, similar to mobile phone networks, to send data directly to your energy supplier about how much gas and electricity you're using. This means you won’t have to read your gas and electricity meters any more, and your bills won’t be estimated.

Smart meters are different from energy monitors. The latter can show you how much electricity you’re using but they don’t communicate this to your provider. 

Smart meter apps

Some energy firms are offering apps for customers who have smart meters, or giving their app users extra functions. These can include top-up for pay-as-you-go customers, plus data about your energy use and spend, and tips to help you save.

Find out what the biggest energy firms are offering in our smart meter roll-out update.

How do smart meters communicate with each other?

When you have a smart meter installed, you'll get a smart electricity meter, a smart gas meter, and also be offered an in-home display (IHD). These elements will talk to each other wirelessly. 

Your electricity meter will be connected to the mains, and will monitor how much power you're using in real time. Your gas meter will be battery powered and 'asleep' for most of the time, waking up every half an hour to give a reading and communicate this via your electricity meter.

The electricity smart meter is connected to a communications hub. Sometimes the hub is built into it. This allows it to communicate with your IHD, using the smart meter home-area network. It also talks to the wider Data Communications Company (DCC) network, via the smart meter wide-area network, so it can send your energy use data to your supplier. 

You’ll get a different communications hub depending on where you live. In the south and central areas of Great Britain, hubs use cellular and wireless mesh technology to communicate with the DCC’s central network. Further north, they communicate via long-range radio.

There are also different technologies to connect your IHD to your communications hub. The latest development is ‘alt-han’ comms hubs which will make communication possible in homes where gas and electricity meters are far apart, there are particularly thick walls, in high-rise flats and in rural areas. These are expected to be available at the end of 2019.

Will smart meters work in my home? 

Around 13.65m smart meters have been fitted in homes and small businesses in Great Britain so far. Most people are happy with their smart meter. Three quarters of the Which? members with smart meters we surveyed in November 2017 said it met or exceeded their expectations on knowing their energy spend, use in kilowatt hours, the accuracy of their bills, and not having to submit meter readings.

But some 943,000 smart meters have lost their smart functionality. This means owners have to send meter readings to their supplier again.

This may happen if you have a first-generation smart meter and switch suppliers – find out more in getting a smart meter installed.

If you live in a rural area, a high-rise block of flats, your home has very thick walls, or your gas and electricity meters are far apart, you may not be able to have smart meters fitted yet.

These factors mean that your gas and electricity meter may struggle to communicate with each other, or with the communications hub that sends your energy use data to your energy firm.

A solution (called ‘alt-han’ communications hubs) is expected to be ready by the end of 2019. This will mean 95% of properties will be able to have smart meters.

Do I have to have a smart meter? 

No, you do not have to accept a smart meter if you don’t want one. Find out more in our guide Do I have to accept a smart meter?

Energy companies have to take ‘all reasonable steps’ to install smart meters in their customers’ homes. This is set out in the conditions of their licenses to supply gas and electricity. 

‘All reasonable steps’ isn’t clearly defined, though, and energy regulator Ofgem told us it will judge if suppliers have done so in 2020. Suppliers that fail to do this could face fines – so they’re under pressure.

At the end of March, the pressure on energy firms to install smart meters is likely to increase. The government is consulting about whether it should introduce a new rule, called the  New and Replacement Obligation. This would mean energy firms must take ‘all reasonable steps’ to install smart meters where they’re replacing an old meter, or installing a meter for the first time (for example in a new-build home).

You’ll still be able to refuse a smart meter if you really don’t want one, but companies may be less willing to install old-style meters.

How much does it cost to install a smart meter? 

Having a smart meter installed doesn't cost you upfront. But energy companies should not tell you that smart meters are ‘free’ because you’ll pay for them indirectly through your energy bills. Overall, the smart meter roll-out will cost almost £11bn, although the National Audit Office estimates that the cost will be £500m higher than this. 

The roll-out will add around £391 in total to the bills of the average dual-fuel household (£17 more than estimated in 2016).

Will a smart meter save me money? 

A smart meter will mean more accurate bills for you - and remove the costs of meter readings, which are currently added to your bills.

Smart meters are expected to cut £47 a year on average from our dual-fuel bills by 2030, according to the government. These savings will come mainly from energy suppliers receiving fewer customer enquiries and making fewer home visits, and, in principle, they should pass on these savings to customers.

Consumers are also predicted to save money by being more efficient with energy used at home. However, smart meters will only save you money if you use and act on the information provided by your in-home display to cut your consumption. 

Follow our tips to become more energy efficient - see our expert advice on cutting your energy bills.

Whether you save through efficiency also depends on how frugal you are already. Our survey of smart meter owners* found a third (34%) think their energy use has reduced since getting a smart meter.

Opinions are inconsistent though: 20% think their energy use has increased. But we found that those who were willing to get a smart meter in the first place (either they contacted their supplier proactively or were recommended one by friends or family) were more likely to see a positive change, probably because they were more motivated to alter their habits.

In the short term, smart meters may actually cost us money. Scottish Power and SSE blamed their 2017 price rises partly on the cost of installing smart meters. 

Meanwhile, the organisation responsible for the wireless network, the Data and Communications Company (DCC), had more than £1.75m of its 2016/17 costs declared unacceptable by energy regulator Ofgem.

Want to save money on energy now? Use our independent switching service to compare gas and electricity prices and find a cheaper deal.

How to get a smart meter 

All of the Big Six energy companies, plus smaller firms including First Utility, Ovo, Utilita and Utility Warehouse, are installing smart meters in customers' homes. Smaller suppliers will also need to begin installing this year, in order to meet the government deadlines for when suppliers must complete their roll-outs.

The vast majority of smart meters installed so far are first-generation. Some consumers with these have faced problems with them losing smart functionality when they switch supplier. Companies are now beginning to install second-generation meters which don’t have this problem.

Find out whether your energy company is installing smart meters yet.

Can I switch energy supplier with a smart meter? 

Long term, smart meters should make it quicker to switch energy suppliers. In theory, they can be instructed to send information about your energy use to a new energy company instantaneously.

In the short term, though, smart meters may actually be a barrier to switching. Some 70% of first-generation (SMETS1) smart meters currently lose smart functionality when consumers change energy supplier, the National Audit Office found in November 2018. 

This can happen if your chosen supplier is unable to operate your smart meter. In this case, you’d need to send meter readings again.

By the end of the roll-out in 2020, the government plans that first-generation meters already installed will be upgraded remotely so that all energy suppliers can operate them. It hasn't been confirmed if this will be possible for all types of first-generation meters yet. Any meters which cannot be upgraded will be replaced.

In the meantime, some suppliers are now able to operate each others’ meters, including those in the table below.

Find out more about switching problems and how to keep your smart meter smart in smart meter problems and solutions.

Fed up with poor customer service or of paying too much for energy? Then switch. Use our independent switching service to compare gas and electricity suppliers and find a cheaper deal. 

*(Online survey: 2,910 members of the general public who have smart meters, September 2018)