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Do I need a smart meter?

By Emma Lunn | Tuesday, February 12th 2019

Smart meters replace traditional gas and electricity meters and automatically send accurate and regular meter readings to a supplier. Read on to find out how they work and when you can get one.

Smart meters are the next generation of gas and electricity meters and are being rolled out between now and 2020. The aim is to put consumers in control of their energy use, so they can save money on their energy bills.

What is a smart meter?

A smart meter is a gas and electricity meter that feeds your meter readings automatically to your provider at regular intervals. Old-style gas and electricity meters require manual reading, either by someone living at the address or a meter reader from the energy company. Without meter readings, your bills will be estimated and could be inaccurate.

Smart meters replace standard meters and automatically send your meter readings to your energy supplier. You'll need one meter for your gas, one for electricity and they’ll usually go in the same spot as your current meters.

Smart meters are being installed in homes across the UK to replace older energy meters, including prepayment meters. Their installation is a joint initiative between Ofgem, the Department for Business Energy and Industrial Strategy, and energy suppliers.

Data from smart meters is transmitted using a national communication network called the Data Communications Company (DCC) which works a bit like a mobile network. The DDC automatically and wirelessly sends your exact energy usage to your supplier.

Smart meters will also come with an in-home display (IHD). This display tells you everything you need to know about your energy usage, for both gas and electricity, on the one display. This information includes how much gas and electricity you’re using at any given moment, what it’s costing (in pounds and pence) and comparisons of what you’re using now with the previous day, week or month.

If you use a prepaid gas or electricity smart meter, it can also show you how much credit you have left, your emergency credit balance, your debt balance (if you have one), and provide an alert if your credit is running low. The idea is that a household will use all this information to decide what can be switched off or turned down to make savings on their bills.

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Don’t confuse them for similar-sounding gadgets

Smart thermostats

Smart meters are different to smart thermostats. A smart thermostat allows you to control your home heating remotely using an app on your smartphone, tablet or computer. It doesn’t communicate with your energy supplier, just your smartphone.

Home energy monitors

It’s also important not to confuse smart meters with energy monitors. Energy monitors calculate the running costs of household appliances and lighting, so you can see how and where you use energy. They are similar to the in-home display you get with a smart meter but the crucial difference is that energy monitors don’t record or transmit meter readings.

First and second-generation smart meters

There are two types of smart meter – first generation (or SMETS1) and second generation (SMETS2). SMETS1 meters were developed first and some energy suppliers have already installed these in people’s homes. But there are a few issues with this type of meter. The main one is that it can lose smart functionality if you switch energy supplier (which you should do regularly if you want to be on the cheapest deal) and will stop sending readings to your supplier. This is sometimes referred to as reverting to ‘dumb mode’.

This doesn’t mean anyone with a SMETS1 smart meter can’t switch providers, it just means you'll have to go back to providing meter readings until a remote upgrade makes your meter multi-supplier compatible. This is expected to happen sometime in 2018.

Suppliers can continue to install SMETS1 meters until 5 October 2018 (this date was pushed back from July 2018). This is the ‘end date’ for SMETS1 installations as things stand at the moment.

SMETS2 meters are smarter because they are fully compatible with the whole network. Households with SMETS2 meters can switch energy suppliers without any issues. Some energy suppliers are holding off installing smart meters until a sufficient supply of SMETS2 meters (and people trained to install them) is available.

Will a smart meter save me money?

Technically, having a smart meter installed won’t save you money. You’ll still be on the same energy tariff as you were before.

However, smart meters offer some handy insights into your daily energy usage and how much it costs. The in-home display lets you see how much energy you are using in real-time and you can see the effects of, say, turning the TV off instead of leaving it on standby mode, or turning the thermostat down a degree or two.

Basically, the idea is that a smart meter will make households more energy efficient. Your bills should be accurate too – no more estimated readings or submitting the wrong numbers because you failed to read the dials correctly.

How to get a smart meter

Energy suppliers started installing smart meters in 2016 and the national roll-out should be complete in 2020.

This means that by sometime in 2020, every household in the UK should have been offered a smart meter. This is a massive logistical and technical challenge for energy companies. Things haven’t gone particularly smoothly so far with the completion date being pushed back, as well as various problems with the meters arising.

Energy companies will contact households to arrange installation of a smart meter, or you can request one from your energy company. Most suppliers are rolling out smart meters area by area, so when you’ll be offered one depends on where you live. It also depends on which supplier you’re with – some smaller firms don't offer them at all yet.

If you’re desperate to have a smart meter right now and your supplier is not yet installing them in your area, you could consider switching suppliers to one currently carrying out installations where you live.

Should I get a smart meter now or wait?

Energy suppliers can continue to install SMETS1 meters until 5 October 2018. As we mentioned earlier, if you have a SMETS1 installed it may revert to ‘dumb’ mode if you switch energy suppliers.

So, whether you should have a smart meter installed now or wait, very much depends on which type of meter your energy supplier plans to install – so the best thing to do is ask.

If it’s first generation (SMETS1), you might want to wait until SMETS2 are being installed by your supplier. Although a remote upgrade for SMETS1 meters to make them multi-supplier compatible is planned for later in 2018, it’s not 100% certain this will happen or even how successful it will be.

If your supplier will install a SMETS2 meter now, there’s no obvious reason to delay installation - if you want one.

Am I obliged to get a smart meter?

There’s no obligation to have a smart meter installed – you’re free to say no when your supplier contacts you. Some people are rejecting smart meters as they have concerns about how their data will be used, even though suppliers need to get your permission to use your data for marketing purposes.

Other people aren’t keen on smart meters as the majority of energy suppliers will still bill customers the same way as now – i.e. they will estimate your annual usage in advance and split the cost into 12 payments. This means you could still end up in credit – or in debt – to your energy supplier.

There’s also been a few horror stories about smart meters with faulty meters billing customers tens of thousands of pounds for a day’s use. But this is extremely rare and will no doubt be remedied by the second generation of meter.

Other people question how often they will actually look at their in-home display. It could well be ignored once the novelty has worn off. However, some energy suppliers are integrating the data into online accounts and apps. Ovo Energy, for example, shows customers how much they’ve spent on refrigeration, heating, wi-fi etc, when they log into their account.

The most cynical of pundits reckon smart meters can be infected with a virus that can cut energy supplies off or be hacked and used for terrorism – neither have happened yet.

How much do smart meters cost?

Smart meters are free but every household will, ultimately, pay for the new meter rollout via their bills. This is the case whether you personally have a smart meter or not (you can’t save money by saying no). It’s estimated suppliers will be adding around £6 per year to bills to cover the rollout across the UK – so not a massive amount of money.

How is a smart meter installed?

Smart Meter installation is not a DIY job – you need a professional. Your energy supplier will send an engineer to your home at a pre-arranged time. British Gas estimates that a typical smart meter installation will take about one-and-a-half hours.

The engineer will temporarily suspend your energy supply, remove your old meters and install new ones in their place, then reinstate your power. The engineer will then set up an in-home display and, hopefully, show you how it works.

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Cable.co.uk currently recommends the following energy comparison sites. Click the logo to visit their site and find the best deal for you.

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