Smart meters – what’s all the fuss?

 In Blog

Smart meters have been in the news a lot recently, and not always for good reasons.  Following an EU directive issued in 2009, the government set a target to install smart meters for energy in all homes (as far as practicable) by the end of 2020.  Recently, concern has been growing that this target – which has already been put back once – is almost certain to be missed.  This article delves into some of the issues around the rollout, and looks at the role that smart metering will increasingly play in reducing the carbon emissions from our energy supply over the coming years.

What is a smart meter?

A smart meter is a replacement for the traditional gas and electricity meters that most of us still have in our homes.  The “smart” bit is that these new meters incorporate communication and control technologies that help both consumers and the energy industry manage supply and demand more effectively, bringing down costs and facilitating the move to a low- and eventually zero-carbon energy supply.

Smart meters have a SIM card installed just like a mobile phone, and use the mobile network to transmit texts containing half-hourly data about your gas and electricity use to a central broker – the Data & Communications Company (DCC) – and onwards from there to your energy supplier, the energy network operator and any third parties who you have given permission to share your data with.

These new meters can also communicate wirelessly with other devices around your home – in the first instance this means you can have a desktop display that shows you how much energy you are using in real time, hourly or daily costs, historic usage etc.

What’s the problem with the rollout?

Quite simply, it’s not happening fast enough to meet the government targets.  As with so many government-led IT projects, this one has turned out to be much more challenging to realise than was originally anticipated, with major technical problems resulting in significant delays to the timetable.

As things stand, only around 13 million smart meters have currently been installed in around the last nine years, out of a total of over 50 million that need replacing.  At the current rate of replacement it would take up to eight further years to complete the rollout.

A particular problem has arisen around the smart meter technical standards.  The original standard (SMETS1) did not allow for interoperability between suppliers, meaning that if your supplier installed a SMETS1 smart meter and you changed supplier, the meter would lose its “smart” capability with the new supplier, in effect reverting to a traditional meter.  Given that around 99% of the smart meters currently installed are SMETS1 meters, this has unsurprisingly been frustrating for many consumers, and is almost certainly acting as a disincentive to switching suppliers.

Meters with the latest standard – SMETS2 – are finally starting to be rolled out, however old SMETS1 meters are also still being installed, and although it should be possible to update most SMETS1 meters to SMETS2 with an over-the-air update, it is likely that some will eventually need to be replaced.

How will a smart meter help me?

One of the major benefits of a smart meter is that you no longer have to read your meter.  Relying on estimated meter readings might not sound like a big deal, but it is surprising how much credit or debt you can build up with your energy supplier over time.  A large build-up of debt as a result of under-estimated usage can result in a shock bill further down line when the meter is eventually read (as it should at least every two years), and this can cause problems for those who are already struggling to pay their bills.  On the other hand, if you have built up credit this often has to be clawed back from the supplier – they are legally required to do this when asked.

Another big advantage of smart meters is that you have much more information about your consumption patterns at your fingertips.  The desktop display that is usually supplied along with the meter gives consumers real-time information about gas and electricity use; phone apps and online portals are also becoming available that can show usage across previous days, weeks, months and even years.  All of this data can help you work out where you might be wasting energy and take action accordingly – for example is the heating coming on during the day when you are at work, and how much electricity are you using in the middle of the night or when you are on holiday?

What other benefits are there to smart meters?

From an environmental perspective, smart meters are a tool to help with the move to a low-carbon economy.  They do this by encouraging what is called load-shifting – moving (or encouraging) demand away from peak times to even out the load across the day.  Shifting loads from peak times reduces the need for inefficient and dirty power plants that run on diesel and coal on a short-term basis to meet the extra demand, reducing carbon emissions and air pollution considerably.  Load-shifting can also help consumers take advantage of gluts in renewable energy production – typically wind and solar – that might otherwise be wasted at off-peak times on windy and/or sunny days.

Smart meters also facilitate the introduction of new time-of-use tariffs.  A bit like more sophisticated versions of Economy 7, such tariffs encourage consumers to shift consumption to times of day that help to even out the load on the network.  For example, at peak times between 4pm and 7pm, the price of electricity is typically increased, and then reduced considerably during late morning and overnight when demand is low.  This is particularly good news for those with battery storage or electric cars to charge up as they can take advantage of much lower energy costs off-peak.

In future, smart meters will be able to talk to similarly smart devices around your home, for example connected fridges, immersion elements and heat pumps, switching them off for a minute or two to help balance the predictable surges in power that accompany ad breaks in popular TV programmes, when millions of us switch the kettle on.

As well as reducing carbon emissions, all of these load-balancing functions help to keep a lid on our energy bills by reducing the need for expensive upgrades to the power network to handle our rapidly changing demands.

Any other problems I should be aware of?

Most smart meter installations go without a hitch, however inevitably a small number hit problems – for example:

  • No mobile signal available for them to send their data back
  • Some smart meters do not take into account solar PV generation
  • Remote or communal meters in blocks of flats that cannot communicate directly with you
  • Physical obstructions to meter replacement

In these cases it will usually be necessary for the installation process to be postponed until the issue is resolved, but this should only happen in a small minority of cases, and you should never end up worse off than you were before.

So… should I get a smart meter?

The short answer is (in our opinion) yes – although you are within your rights to keep your old meter.  According to various surveys, the vast majority are happy with their new smart meter installation.  The more important question perhaps is when you should have one installed.

Not all suppliers are currently offering smart meters, in particular the smaller suppliers with more limited resources.  On the other hand some are mandating them for specific time-of-use tariffs.  Installations are typically organised when installers are already planned to be in the area, so to some extent you are in your supplier’s hands.

There is also an argument for waiting until your supplier can provide a SMETS2 meter so you are not lumbered with the risk that it will have to be replaced further down the line.

Overall though, we believe that smart meters play an essential and useful role in our collective effort to reduce greenhouse gas emissions, and the quicker the rollout progresses, the sooner we will all start benefiting.

Further information

Smart Energy GB – the official UK smart metering website with much more information on all aspects of smart meters and the rollout.

National Audit Office report on the smart meter rollout – November 2018


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