Fuel Rights Handbook 20th editionChapter 4: Meters and methods of payment2. Types of meters Smart meters
Back to previous
Newer version available

There is a newer version of this publication available:
Fuel Rights Handbook 21st edition

Chapter illustrations ()
Loading image navigation...
No image index could be found for this publication.
Close this Panel
Smart meters
The smart meter roll out
The Energy Act 2008 establishes the mandate for installing smart meters and requires that gas and electricity customers are provided with ’information on actual time of use’ as far as is technical feasible.1ss88-91 Energy Act 2008 The government’s aim was for every household to have a smart meter at no upfront cost by the end of 2020. This target was not met. Energy suppliers were subsequently required to take all reasonable steps to roll out smart meters by the end of December 2021. From January 2022, all suppliers have binding annual installation targets to roll out smart and advanced meters to their remaining non-smart customers by the end of 2025.
The term ’smart meter’ relates to the services and benefits obtained from such a meter rather than a specific type of technology. Smart meters measure your exact fuel usage and send the information electronically to your supplier without the need for meter readings to be taken. Smart meters can be set in either credit or prepayment mode.
Smart meters give better budget management tools such as low credit alerts and high consumption alerts which may safeguard against self-disconnection.
Fuel companies are responsible for meeting the cost of installing smart metering equipment.2Condition 33A SLC This comprise of a smart meter, a communications hub, an optional in-home display (IHD) and prepayment interface device. The Smart Meter Installation Code of Practice sets out the rules to be followed by suppliers when installing smart meters.3recportal.co.uk/smicop; Condition 41 Electricity SLC and 35 Gas SLC
Second generation smart meters (SMETS2) are currently being installed (see here). These meters enable easier switching of supplier without losing smart functionality. First generation smart meters (SMETS1) are in a programme of software upgrades that will enable them to match the functionality of SMETS2. These upgrades are expected to be completed by end December 2023.
The IHD provides real-time information about your consumption, as well as showing the amount of energy being used at 30 minute intervals and over various time periods (day, month and year), and the cost of this energy in pounds and pence. The information may also be accessible online or via an app to track energy and costs. You can set up email or text message alerts to track unusual patterns of consumption.
Smart meters are expected to improve the experience of prepayment meter customers. Potential benefits include:
    •more convenience and choice in payment top-up methods;
    •greater flexibility and emergency credit arrangements – including low credit alerts;
    •the ability to switch remotely between credit and prepayment modes.
Over time, smart meters are expected to result in greater consumer engagement and stronger competition between energy suppliers due to the increased ease of consumer switching, information on true consumption and tariffs. The digital energy infrastructure will enable new technologies and efficiency savings to be integrated into the existing system and respond to outages. The government publication, Smart meters: a guide is a useful source of information.4gov.uk/guidance/smart-meters-how-they-work
 
1     ss88-91 Energy Act 2008 »
2     Condition 33A SLC »
3     recportal.co.uk/smicop; Condition 41 Electricity SLC and 35 Gas SLC »
4     gov.uk/guidance/smart-meters-how-they-work »
Advantages of smart meters
    •There is no need for estimated bills, with suppliers able to read meters remotely via two-way communications technology. This should dramatically reduce the number of inaccurate bills issued.
    •You have real-time information to help control and manage your energy use, save money and reduce emissions.
    •It heralds the end of having to read meters in inaccessible locations in the home such as under the stairs and in cupboards. The information on your energy use can be provided through the IHD unit, via the internet or even through a mobile phone.
    •Smart meters provide more detailed, user-friendly information on your energy consumption. The IHD shows you how much energy you are using and roughly how much it is costing you in pounds and pence. It is believed that by knowing how much you are using, and how much your appliances cost to run, you will be able to reduce your energy consumption and save money.
    •Some suppliers offer accessible in-home display (AIHD) units for blind and partially sighted people. AIHD units have accessibility features such as text-to-speech, large vibrating buttons, coloured LEDs for indicating fuel usage and screens optimised for visual impairment and colour blindness.
    •If you have a smart prepayment meter, it should be easier to top-up your meter. Cash payment can always be accepted, but suppliers can also offer more convenient ways to top-up, such as over the phone, online or on an app.
Disadvantages of smart meters
    •A major disadvantage is remote disconnection of your gas or electricity supply in the event of non-payment, or an error creating an assumption of non-payment. This removes the protection afforded by most suppliers with the previous system – that suppliers could not disconnect your supply in the first instance without being given access to your property to perform the disconnection, or to fit a prepayment meter. With smart meters, entry is not necessary for disconnection. Ofgem has rules to ensure that suppliers treat disconnection as a last resort. Suppliers must ensure that vulnerable households are not disconnected. If you have an energy debt, discuss repayment options with your supplier.
    •Suppliers can remotely switch the meter between credit mode and prepayment mode and do not have to physically visit the property to change meters. Energy UK guidance states that suppliers must first ensure that it is safe and reasonably practical for a customer to use a prepayment meter.1For suppliers’ obligations, see energy-uk.org.uk/files/docs/Disconnection_policy/Sept15_EUK_Safety_Net.pdf
    •There can be problems if you live in a rural area with limited wireless connection.
    •Some consumer groups are concerned that safeguards are needed to manage the collection of consumers’ data uploaded by meters and the right to privacy.
Safeguarding smart meter data
The government publication Smart Meters: a guide for households focuses on, among other areas, consumer protections and consumer privacy. You should be able to choose who can access information collected by the meter by opting out of particular kinds of data management. Energy UK has published a guide which explains what information smart meters can collect, who the information may be passed on to and in what circumstances. For example, other industry parties in connection with supply and distribution issues, or police and law enforcement agencies in order to prevent and investigate fraud. Restrictions on the collection of electricity data are also contained in SLC 47 for electricity.
 
1     For suppliers’ obligations, see energy-uk.org.uk/files/docs/Disconnection_policy/Sept15_EUK_Safety_Net.pdf  »