A smart meter is a new type of meter that replaces the traditional meter in your home to measure your gas and/or electricity use. We have a great article on how smart meters work if you’d like to find out more.
The government has set a target for all homes to have been offered a smart meter by the middle of 2025. Currently about half of the 27 million homes in the UK have a smart meter.
You do not legally have to have one installed, so if you are offered a smart meter by your supplier, should you take them up on it? Here we look at the pros and cons of smart meters.
The pros of having a smart meter
Let’s look at the pros of having a smart meter installed first:
Free of charge
Top of the list has to be that they are free. You could argue that you have already paid for it through increased bills from your supplier, but the fact is that to have one installed, there is no charge.
You could save money
Having a smart meter gives you an insight into how much energy you are using and what effect different actions have on your usage and spend. It can help you to modify your behaviour, and by doing so you can trim money off your energy bill. Being able to see your energy cost in pounds and pence rather than in kilowatt-hours helps to hit home how costly your energy usage is.
You don’t need to provide meter readings
Smart meters automatically transfer their data to the energy supplier, so you will never need to get the torch out and scramble around in a dark cupboard to get your meter reading. Additionally you won’t have an engineer knock on your door looking for a meter reading again.
You are likely to benefit from better deals
Energy suppliers tend to offer better tariffs to customers who agree to have a smart meter installed. This can be as an incentive you have a smart meter installed or it can be because it will mean they make savings on admin costs.
You will also likely have access to more innovative tariffs, like the Agile tariff from Octopus Energy, that can actually pay you for your cutting energy usage during peak times.
No more estimated bills
As your energy usage is transmitted regularly straight to your supplier, they will never have to estimate your bill again. When you don’t have a smart meter and you fail to give your supplier a meter reading, they traditionally base your bill on an estimate of your past usage. In the past, this has resulted in problems for consumers who end up being seriously over or undercharged. With a smart meter, this is no longer a worry.
The cons of having a smart meter
We have covered the pros of smart meters. Now lets look at the cons:
The roll-out program of smart meters didn’t come cheap. The initial cost was 11 billion, suppliers will need to recoup this through energy bills over the next few years. According to citizen’s advice, the rollout is likely to cost £1 billion more. Which could lead to approximately £390 added to every household’s bills spread over the next few years.
Data privacy concerns
Smart meters collect a lot more data than traditional meters. With data being collected nearly continuously about your any usage, this data could be used to track your behaviour and habits (for example when you leave the house). There are strict regulations around how this data can be used and who has access to it, but it is a valid concern that is not an issue with traditional meters.
You have to be proactive to save money
Unfortunately, the smart meter doesn’t save you money without you having to take any action. To reap the benefits, you will need to use it as a tool to monitor times when your energy spend is higher than it needs to be and look at ways to reduce your usage, which in turn will save you money.
They can stop working after switching energy supplier
The first generation of smart meters has a fault which means when you switch energy suppliers they lose some of their functionality. Newer models being rolled out today are the second generation and do not have this problem, but it can be an issue for those that were some of the first households to have them installed.
Smart meters are not available to some prepayment tariff customers
The rollout of smart meters on prepayment tariffs has been limited. They do exist and there are many benefits of having one if you pay by this method. Hopefully, more suppliers will offer smart meters to this group of customers.
So, should I get a smart meter?
The benefits of getting a smart meter clearly outweigh the disadvantages. No more estimated bills, and no more manual meter readings. You can monitor your energy usage in near real-time and adjust your habits to reduce your energy bills. It may even give you access to tariffs that are cheaper than those accessible on a traditional meter.
One big disadvantage is that although there is no direct cost, the smart meter rollout is costly and you will be paying for this through your bills. You will be contributing to this however even if you don’t have a smart meter installed.
Overall, for the majority of customers it makes sense to have a smart meter installed but as they are not compulsory, this decision is up to you. We have a great guide on how to get a smart meter if you feel one is right for you.
If you have more questions related to smart meters, why not try our smart meter FAQ page.