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20 May 2021

What is a smart meter?

Find out more about gas smart meters and smart electricity meters, including what is a smart meter, how to read a smart meter and how smart meters work.
Generic smart meter ihd
SI
Sarah Ingrams

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 this information over wireless networks to your supplier.

Smart meters come with an in-home display (IHD), which shows you how much energy you use in real time, and how much it's costing. You might also have an online account or app where you can see this. Knowing this should help you to better control your energy use. 

Here, we explain exactly what smart meters are, how they work, whether you have to have a smart meter, how to get a smart meter, and whether getting one installed could save you money.

Find out what to expect from a smart meter installation.

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.

Within your home your gas smart meter, smart electricity meter and in-home display (IHD) talk to each other wirelessly. 

Electricity smart meters are connected to the mains and monitor how much power you're using in real time. Gas smart meters are battery powered and 'asleep' for most of the time, waking up every half hour to give a reading and communicate this via your electricity meter.

An 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. Most homes will get a standard, ‘single-band’ hub, as these work for 70% of properties. If you’re not among these, you’ll most likely get a dual-band communications hub, as these will work in an additional 24-27% of homes. 

The latest development is ‘alt HAN’ comms hubs, which will make communication possible in homes where gas and electricity meters are far apart or where there are particularly thick walls, as well as in high-rise flats and rural areas. These hubs will help the final 3-6% of homes. They should start to be installed in homes in 2021.

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

SMETS2 smart meters and SMETS1 smart meters

There are two types of smart meter: first and second generation. These are also referred to as SMETS1 and SMETS2 smart meters. SMETS stands for Smart Metering Equipment Technical Specification.

Energy companies are currently installing second generation smart meters (SMETS2). These are automatically connected to the central wireless network which should mean they can be operated by all energy suppliers. 

When energy companies began installing smart meters several years ago, they fitted first generation smart meters. More than 15m of these were fitted, making them the more common kind of smart meter at the moment.

The government set standards for smart meters to make sure that they all worked in a similar way. But a flaw means that first generation smart meters can lose their smart functions when you switch supplier. First generation meters are being connected to the central wireless network to solve this problem – find out more about these smart meter problems and how to solve them

Do I have to have a smart meter?

No, you don't have to accept a smart meter if you don’t want one.

Energy companies must 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. 

They have to set themselves annual targets for installing smart meters by the end of 2025. ‘All reasonable steps’ isn’t clearly defined, though, and Ofgem judges whether suppliers have done this. Companies that don’t meet their targets can be fined, so they’re under pressure.

Energy companies also have to 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 can still refuse a smart meter if you really don’t want one, but companies might be less willing to install old-style meters. Some energy tariffs now require you to have a smart meter, or have one installed within a few months of signing up.

If you really don’t want a smart meter, ask your energy supplier if it can set one up to work in ‘dumb mode’, with all the communications turned off.

But if your energy company has contacted you to change your meter because your current one needs replacing (ie it’s too old), then you should get it replaced as it could be a safety hazard if you don't.

Can rural homes and flats have smart meters?

Yes, eventually all homes should be able to have smart meters.

However you might need to wait longer if:

  • You live in a rural area
  • You live in a high-rise block of flats
  • Your home has very thick walls
  • Your gas and electricity meters are far apart

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. 

Contact your supplier to check whether it's possible to fit a smart meter in your home. Some suppliers are expected to be able to fit meters in these homes soon, thanks to a solution (called ‘alt HAN’ communications hubs, see above).

Switch seats to get a different perspective while you work

Can I have a smart meter if I rent?

Yes, if you rent your home, you can get a smart meter installed as long as you're paying the gas and electricity bills directly to the supplier. 

If your landlord pays the energy bills, it's their decision whether to get smart meters.

Check your tenancy agreement if you’re not sure; it might also restrict how energy is supplied to the property you're renting. This could include the type of meter that can be installed. It’s a good idea to tell your landlord before you get a smart meter installed, even if your tenancy agreement doesn’t say you have to.

Do smart meters save 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 £250 on average from our dual-fuel bills between 2013 and 2034, 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.

Homes may be able to save money by being more energy efficient. However, smart meters will only save you money in this way 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 10 ways to save on energy bills.

Whether you save through efficiency also depends on how frugal you are already. 

Some energy firms sell cheaper deals for smart meter customers. There are also tariffs which have cheaper electricity rates at times of day when fewer people are using power – you’ll need a smart meter to sign up to most of these so you energy company knows when you’re using electricity so it can bill you correctly.

In the short term, smart meters may actually cost us money. The government calculates that they’ll come at a cost to households initially, but start saving money for customers overall from 2022.

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

Are smart meters free?

You do not need to pay anything upfront to have smart meters installed. There is no upfront cost for your in-home display either.

But energy companies shouldn't tell you that smart meters are ‘free’, because ultimately you pay for them indirectly, through your energy bills. This is how traditional gas and electricity meters are paid for too.

The government explained in 2019 that ‘just as with traditional metering, smart meter costs are recovered from energy supplier’s entire customer bases’.

Over the course of the smart meter roll-out, the cost equates to around £391 in total per average dual-fuel household according to the National Audit Office in 2018.

Do smart meters need wi-fi?

No. You don’t need wif-fi or a broadband connection in your home to have smart meters. They communicate using a secure national wireless network used only by smart meters.

Video: Smart meter myths debunked

In this video, our experts cut through the conspiracy theories about smart meters. If you're concerned that smart meters could be a risk to your health, your privacy or you bills, discover whether or not you really have anything to fear.

Can I get a smart prepayment meter?

Yes, smart meters work if you prepay for your gas and electricity. You should be able to see how much credit you have left on your in-home display or using your energy company’s app.

You’ll be able to top-up without going to the shop with many energy firms, via an app, text, over the phone or in your online account. If you top-up at the store, credit is automatically added to your meter without needing to insert your key or card. 

If you want to change how you pay, for example credit, you won’t need to get a new meter fitted. Payment modes can be changed remotely.

Find out whether a prepayment meter is right for you.

What data will my smart meter collect?

Smart meters record your gas and electricity use. They don’t store or transmit personal information that could identify you, such as your name, address or bank details. Your energy firm will still have these on your account.

Your gas and electricity meter readings that your smart meter collects are shared with your energy supplier so they can bill you accurately.

Information about energy use is your data, so you can choose what you want to do with it – and change your mind about how much you share, and how often. The only exception is when your data is required for billing or other regulated purposes (such as responding to customer questions, registering a prepayment meter top-up or investigating theft, for example).

You can choose:

  • how often your smart meter sends data to your gas and electricity firm (monthly is the minimum, daily is the default if you don’t state a preference, or you can opt in to half-hourly: check what your energy supplier suggests as default)
  • whether to share your energy-use data with other organisations, for example price comparison websites
  • if your supplier can use your data for sales and marketing purposes
  • whether your supplier is allowed to share your energy-consumption data with other organisations
  • how to access information about your energy data to get most benefit from it.

Can I switch energy supplier with a smart meter?

Yes, having a smart meter does not stop you from switching supplier. 

However if you switch and the new supplier cannot read your smart meter then it will turn ‘dumb’. This means you’ll need to take meter readings and send them to your supplier and your in-home display won’t show how much your gas and electricity use is costing you.

Around 70% of first-generation smart meters lost smart functionality when consumers changed energy supplier, the National Audit Office found in November 2018. We’ve heard from lots of Which? members who have had this problem.

This should be resolved as first-generation smart meters are updated so they work with the central wireless system. When this has been done, you should be able to switch supplier and keep your meter smart. 

Find out what to do if your smart meter stops working and other smart meter problems and how to solve them.

In the long run, 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.

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


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