Smart meters have been rolled out across the UK since 2011, with the government aiming for every home to be offered one. But what exactly are they, how do they work, and will they actually save you money? This guide covers everything you need to know.
What Is a Smart Meter?
A smart meter is a digital gas and electricity meter that automatically sends your usage readings to your energy supplier. Unlike traditional meters that require manual readings or estimated bills, smart meters communicate your exact consumption in near real-time.
Every smart meter installation comes with an In-Home Display (IHD) — a small portable screen that shows you how much energy you're using right now, in pounds and pence. This immediate feedback is what helps people reduce their consumption.
How Do Smart Meters Work?
Smart meters use a secure wireless network (similar to mobile phone signals) to send your meter readings to your energy supplier automatically. Here's the process:
- The smart meter measures your gas and electricity consumption continuously
- Readings are sent to your supplier via a secure national network (the DCC — Data Communications Company)
- Your supplier uses these readings to produce accurate bills — no more estimates
- The In-Home Display receives data from the meter and shows your usage in real-time
Smart meters typically send readings once every 30 minutes, though you can choose to share data less frequently if you prefer (daily or monthly readings).
SMETS1 vs SMETS2: What's the Difference?
There are two generations of smart meter in the UK:
| Feature | SMETS1 (First Generation) | SMETS2 (Second Generation) |
|---|---|---|
| Installed | 2011 – 2018 | 2018 – present |
| Switching suppliers | May lose smart functionality | Works with any supplier |
| Network | Supplier's own network | National DCC network |
| Prepayment mode | Limited support | Can switch between credit and prepay remotely |
| Future-proof | Being upgraded to SMETS2 standards | Yes — designed for long-term use |
If you had a smart meter installed before 2018, it's likely a SMETS1. The good news is that most SMETS1 meters are being enrolled onto the DCC network, which restores their smart functionality even if you switch suppliers.
Benefits of Smart Meters
- Accurate bills — No more estimated bills or overpaying. You only pay for what you actually use.
- Real-time awareness — The In-Home Display shows exactly what you're spending, making it easy to spot energy-hungry appliances.
- Easier switching — Your usage data makes it simpler to compare tariffs and find the best deal.
- No meter readings — No more crawling under the stairs or waiting for meter readers to visit.
- Supports time-of-use tariffs — Smart meters enable tariffs that charge less at off-peak times (e.g., overnight for EV charging).
- Prepayment without tokens — Prepay customers can top up online or via an app instead of visiting a shop.
Do Smart Meters Actually Save Money?
A smart meter alone doesn't reduce your bills — it's a measurement tool, not an energy-saving device. However, research consistently shows that the awareness they provide leads to behaviour changes:
Key finding: According to the Department for Energy Security and Net Zero, households with smart meters and IHDs reduce their electricity consumption by 2.8% and gas consumption by 2% on average. For a typical household, that's approximately £30–£50 saved per year.
The savings come from simple actions prompted by seeing real-time costs: turning off lights, not overfilling the kettle, running the washing machine on a lower temperature, and identifying appliances that cost more than expected.
Are There Any Downsides?
- Signal issues — In some areas (thick walls, rural locations), the meter may struggle to connect to the network. This doesn't affect your supply, just the smart functionality.
- SMETS1 switching problems — Older meters may temporarily lose smart features when you change supplier (though this is being resolved).
- IHD battery life — The In-Home Display needs to be plugged in or recharged. Some people stop using it after the novelty wears off.
- Installation time — Installation takes 1–2 hours and requires someone to be home. Your supply is briefly interrupted during the swap.
How to Get a Smart Meter
Smart meters are free to have installed — the cost is spread across all energy bills nationally, whether you have one or not. To get one:
- Contact your current energy supplier (don't switch first)
- Request a smart meter installation appointment
- An engineer will visit your home (typically takes 1–2 hours)
- They'll replace your old meter(s) and set up your In-Home Display
You cannot be forced to have a smart meter — it's entirely optional. However, since the cost is already included in everyone's bills, there's little financial reason to refuse one.
Smart Meters and Our Calculator
Our energy cost calculator complements your smart meter perfectly. While your IHD shows real-time spending, our calculator lets you project costs forward — estimating monthly and yearly costs for specific appliances, and revealing how much standby power is costing you over time. Use both together for complete visibility over your energy spending.
Summary
Smart meters are a free, useful tool that gives you accurate bills and real-time visibility of your energy spending. They won't magically cut your bills, but the awareness they provide typically leads to savings of £30–£50 per year through small behavioural changes. If you haven't got one yet, there's no cost to installation and very little downside.