Ofgem published its final Impact Assessment on 30 January 2026 confirming that Smart Meter Guaranteed Standards of Performance 1 to 3 will proceed with automatic compensation for consumers when those standards are not met1. The decision follows a statutory consultation in August 2025 and a March 2025 consultation on the need for the standards1. The approach to GSOP 4 will be addressed separately in a future publication1.
The three standards cover long waits for a smart meter installation appointment, installation failures, and the handling of reported operational issues with a smart meter1. Ofgem said the standards are intended to deliver better consumer protections and improve service standards across the energy sector1.
"we have now reached a final decision to progress automatic compensation for consumers when GSOP 1-3 standards are not met."
The Impact Assessment sets out costs for GSOPs 1 to 3 alongside those previously estimated for GSOP 4, which is now out of scope1:
| Cost category | GSOPs 1-3 | GSOP 4 |
|---|---|---|
| Set up costs | £6.7m | £22.5m |
| Annual ongoing costs | £3.7m | £6.1m |
| Redress | £19.7m | £108.9m |
Ofgem states that redress for GSOPs 1 to 3 is estimated at £19.7 million, described as a direct transfer from suppliers to the consumers who receive compensation1. The document says the retail price cap does not provide a mechanism for suppliers to recover this cost from the wider consumer base, because the cap is intended to reflect notionally efficient costs and so will not include an allowance for compensation payments1. Set up costs of £6.7 million are annuitised to £1.1 million annually, and combined with £3.7 million in annual costs the total is equivalent to £4.8 million each year, or £0.17 per customer per year even if entirely allocated to domestic consumers1.
Ofgem cites Citizens Advice findings that, of consumers who proactively contacted their supplier about getting a smart meter, 33% were told they could not have one and a further 24% said their supplier had made no effort to install one1. Department for Energy Security and Net Zero research following 274 consumers between August 2023 and February 2024 found only 73% were able to book an appointment1. Ofgem also cites Citizens Advice reporting that 46% of people without a smart meter are put off by negative media coverage and 21% by friends' or family members' bad experiences1.
Why it matters for households
The standards create a route to automatic payment when a supplier misses the defined service levels on installation appointments, failed installations and unresolved meter problems, rather than leaving households to complain and pursue redress themselves. Ofgem states that no current Guaranteed Standards refer explicitly to smart meters, leaving smart meter consumers without adequate recourse for smart-specific issues1. Because the price cap is not expected to include an allowance for compensation payments, the cost sits with suppliers rather than being spread across all bills1. The deferral of GSOP 4 means the position on meters that are not operating in smart mode, including the question of exemptions for other parties and the compensation re-occurrence period, remains undecided1. Households relying on a smart meter for accurate billing and for time-of-use tariffs will not see that fourth standard introduced on the same timetable. The wider framework of supplier guaranteed standards and the power cut compensation arrangements are unchanged by this decision.
What happens next
Ofgem states that arrangements for GSOP 4 are subject to further revision following consultation feedback, and that announcements will be made at a future date1. The Impact Assessment lists introducing the smart meter Guaranteed Standards in 2026 among its specific objectives1. No date for the GSOP 4 publication has been reported.