Smart meters generate strong opinions. Some people see them as the foundation of a smarter, more efficient energy system. Others see them as surveillance devices that give suppliers too much information. The reality is more mundane: a smart meter is a digital meter that sends automatic readings to your supplier, eliminating estimated bills. What it enables, in combination with smart tariffs and home technology, is genuinely useful, but only if you have the right devices to benefit from it.
SMETS2 Meters
First-generation SMETS1 smart meters were installed from around 2012 and had a significant problem: they operated on a proprietary network and stopped working as smart meters if you switched supplier. Millions of SMETS1 meters reverted to dumb meters when customers switched.
SMETS2 meters, the current standard, operate on the Data Communications Company (DCC) network, which is shared across all suppliers. If you switch supplier with a SMETS2 meter, it continues to send automatic readings to your new supplier without any change to the meter itself. SMETS1 meters can now be enrolled on the DCC network retrospectively, though the process is slow.
If you've had a SMETS1 meter installed and it reverted to non-smart mode when you switched supplier, contact your current supplier to enquire about DCC enrolment or a replacement with a SMETS2 device.
What Smart Meters Enable
A smart meter itself doesn't save you money: it's the foundation for other things that do. Specifically:
Accurate billing. No more estimated bills. You pay for exactly what you use, which eliminates both over-payment (paying estimates that exceed actual consumption) and under-payment (which leads to catch-up bills). This is straightforwardly useful for everyone.
Half-hourly consumption data. SMETS2 meters record consumption in 30-minute intervals. You (and your supplier) can see exactly when you're using energy and how much. This visibility is the foundation for identifying energy waste and for qualifying for time-of-use tariffs.
Time-of-use tariffs. These require half-hourly metering to function. A supplier cannot charge you different rates at different times of day if they can only read your meter monthly.
Time-of-Use Tariffs
Time-of-use tariffs charge different rates for electricity at different times of day, reflecting the actual cost of electricity on the wholesale market. They're most useful for households that can shift significant loads to off-peak periods.
Octopus Go and similar EV tariffs. Cheap overnight rates (typically 7-10p/kWh between midnight and 5am or 6am) for EV charging. The standard rate applies at other times. For someone driving 10,000 miles per year in an EV with a 4 miles/kWh efficiency, charging overnight at 7.5p/kWh rather than 24p/kWh saves roughly £400 per year.
Octopus Agile. Variable half-hourly pricing that tracks wholesale electricity prices. When wind generation is high and demand is low (often overnight in windy periods), prices can be negative: the supplier pays you to consume electricity. Requires active engagement to benefit fully, but households with flexibility (heat pump, battery, EV) can achieve significant savings.
Intelligent Octopus. Combines the EV tariff with smart integration directly with compatible EV chargers (Ohme, Wallbox, and built-in chargers in many Tesla, BMW, and Volkswagen EVs). The charger communicates with Octopus and charges the car during the cheapest periods automatically, without any manual scheduling.
Economy 7 (legacy TOU). The original time-of-use tariff, designed for storage heaters and hot water immersion heaters. 7 hours of cheap overnight electricity, higher day rate. Still relevant for storage heater households; generally not the best option for heat pumps or EVs compared to modern tariffs.
The value of time-of-use tariffs scales with your flexible loads. If you have an EV, a heat pump, a hot water cylinder, and a battery, a TOU tariff can save hundreds of pounds per year. If you have none of these, the benefit is much smaller and may not outweigh the complexity.
The In-Home Display
Smart meters come with an in-home display (IHD): a small screen showing current and historical energy consumption and cost. These are useful for initial behaviour change (seeing real-time cost per hour of use can prompt efficiency improvements) but most people stop using them regularly after a few months.
More sophisticated monitoring is available through third-party energy monitoring devices (Sense, Emporia, Hildebrand Glow) that integrate with the smart meter's consumer access device (CAD) or smart meter data portal. These provide app-based monitoring, detailed disaggregation of consumption by appliance, and integration with smart home platforms including Home Assistant.
Privacy Considerations
Smart meters send half-hourly or more frequent readings to suppliers. This data can, in principle, reveal a great deal about your household's habits: when you're at home, when you sleep, when you cook. UK smart meter privacy regulations require that half-hourly data is only shared with third parties with your consent, and that you can request daily or monthly reading frequency if you prefer less granular data collection.
If privacy is a concern, ask your supplier about data sharing options when the meter is installed or enrolled.