How Much Does a Smart Meter Cost?

A smart meter carries no upfront charge. Energy Saving Trust states that smart meters are "completely free, and there's no upfront charge for the installation"¹, and Which? advises that a household should not pay anything upfront either for the meters or for the in-home display that comes with them². Ofgem's own line to consumers is to contact your supplier to get a smart meter for free³. Citizens Advice puts it as plainly: you will not have to pay to get a smart meter installed⁴.

That is not the same as saying nobody pays. The Welsh Government's climate action guidance is explicit that there is no direct cost for a smart meter, and that any expenses are recouped through energy bills over time⁵. Which? makes the same point from the consumer side, that energy companies should not describe smart meters as "free", because customers ultimately pay for them indirectly through bills². Smart Energy GB, meanwhile, states that there is no extra cost to get a smart meter and the display screen, and that you will not have an extra amount on your bill⁶, so the language used across the sector differs even where the underlying arrangement does not. What is consistent is that there is no separate line item, no invoice and no installation fee.

The second distinction matters just as much. Citizens Advice notes that a smart meter will not automatically save money⁴: it measures and reports, and any saving depends on what the household then does. The meter itself costs nothing to run, because smart meters do not use your electricity supply⁶.

What a smart meter is and what it does

Smart meters are devices installed by an energy supplier that measure how much gas and electricity a home is using, with readings then sent automatically to the supplier⁹. Ofgem describes the same function: a smart meter automatically sends electricity and gas meter readings to the supplier, and the meter's in-home display shows how much energy is being used during the day³. The Data Communications Company, which operates the network the meters use, states that readings are sent automatically via the DCC's secure network¹⁰, and that smart meters are digital devices recording electricity and gas usage in real time¹¹.

The in-home display is part of the package and is not billed separately². Smart Energy GB is clear about what it is for: the display is for information only, and households still receive regular energy bills in the same way as before¹². It is an information device, not a control device. Smart meters are also different from smart heating controls, and one can be used without the other¹. Households wanting more granular data than the display gives can look at consumer access devices or a home energy monitor, which are separate purchases.

Two generations exist in Great Britain, and the difference matters for what happens when a household switches supplier. That distinction is covered in detail on SMETS1 and SMETS2 meters, and the network side on how smart meters communicate.

How the rollout works and who installs the meters

The rollout is delivered by energy suppliers, not by the government or the network companies. Ofgem states that the smart meter roll-out is being implemented by energy suppliers across the country, who are installing millions each year¹³, and the distribution network operator National Grid confirms that the roll out is being led by energy suppliers¹⁴. Energy suppliers have been rolling out smart meters since 2012¹⁵, and Ofgem notes that the rollout has been underway for over 12 years¹⁶. The Data Communications Company describes the aim as completing the rollout by the end of 2030⁸. The Consumer Council for Northern Ireland describes the full roll out there as taking place over several years⁷.

The obligations on suppliers are set in frameworks. The Rollout Framework covering 2022 to 2025 ran as a four-year obligation from 1 January 2022¹³. Smart Energy GB states that every home in England, Scotland and Wales will be offered the opportunity to upgrade to a smart meter by their energy supplier before the end of the rollout¹⁷. Once government considers the rollout complete, responsibility for smart metering is to pass to Ofgem and the Smart Energy Code governance¹⁵.

Being offered a meter is not the same as being able to get one. Smart Energy GB lists among the reasons a household may be turned away that its supplier is not currently installing smart meters in its area¹⁸. Citizens Advice has recommended that the government's forthcoming new rollout framework should incentivise suppliers to install smart meters for all consumers who want one and tackle barriers for consumers less likely to have a meter, including those in the private rented sector¹⁹. The nation-by-nation picture is set out on smart meters in Scotland, in Wales and in Northern Ireland, and the broader programme on the UK smart meter rollout.

Nothing upfront, but no automatic savings

The two halves of the cost question need holding together. On the charge side, the sources are unanimous. The Consumer Council for Northern Ireland states there will be no separate fee for a smart electricity meter installation⁷. Age UK notes that energy suppliers must install smart meters at no extra cost, so a household should not be asked to pay to have one installed²⁰. Smart Energy GB states the smart meter installer does not have to be paid on the day²¹. The DCC states that getting a smart meter installed is free for UK energy customers²².

On the saving side, the position is more careful. A smart meter will not automatically save money⁴. The DCC frames the mechanism honestly: except by switching, a household does not control the tariff its supplier sets, but it can change how much energy it uses¹⁰. Ofgem's summary of the benefit is that a household could find ways to save money using up-to-date information on its energy use³. The saving, in other words, is behavioural and tariff-driven rather than mechanical.

Because the money sits in bills rather than on an invoice, it sits alongside the other components of a regulated price. Ofgem sets maximum prices for a unit of energy and daily standing charges, with separate caps for gas and electricity, and the cap does not limit annual bills²⁴. The cap is revised each quarter²⁴, applies where a customer has not signed up for a fixed-term contract²⁴, and a separate cap is set for each of the 14 regions of Great Britain²⁴. Network costs alone make up almost 30% of the total²⁴.

Accurate bills and the end of the estimate

The clearest return on a working smart meter is billing accuracy. Ofgem states that a household with one will get bills based on accurate meter readings and not estimates, and does not need to submit meter readings itself²⁵. The government's statement of consumer rights describes smart meters as enabling accurate billing by automatically recording energy use in half-hour periods²⁶. SSEN puts the practical effect as accurate bills, with no more estimated bills or meter reader visits to the home²⁷. National Energy Action states that the supplier will no longer send estimated bills and there is no need to provide meter readings yourself²⁸.

For households who find meter reading difficult, that is more than convenience. Smart Energy GB notes the benefit for carers, who no longer need to take readings on behalf of the person they care for²⁹. Readings are sent automatically and securely, so manual readings are not required in normal operation³⁰.

Manual reading remains possible and occasionally necessary. A smart meter usually sends readings automatically, but there are still times when a reading is needed: switching supplier, checking usage, or resolving an account issue³¹. Some electricity smart meters show separate readings for day and night tariffs, for Economy 7 pricing, and for peak and off-peak usage³¹. Meters not operating in smart mode can still be read by hand³². Where estimates keep arriving despite a smart meter, the page on estimated bills with a smart meter covers the causes.

Tariffs, dual rates and time of use

Ofgem lists access to more flexible tariffs, including dual-rate tariffs, among the benefits of a smart meter²⁵. The Energy Ombudsman states that all smart meters can support tariffs which charge different prices at different times throughout the day and night, including Economy 7, and that Economy 10 meters are also available³³. Which? describes smart meters as enabling time-of-use tariffs, where different amounts are charged for electricity used at different times³⁴.

Economy 7 is a dual rate tariff with two distinct electricity rates³⁵, a two-tier system where day and night usage are charged differently and the night rate is less expensive³⁶. Economy 7 and Economy 10 are older time-of-use tariffs that need compatible meters, using fixed cheaper periods, while newer electric vehicle and tracker tariffs can be more dynamic and usually work best with a smart meter³⁷. Smart Energy GB states that a household on Economy 7 or Economy 10 can get a smart meter¹⁸, though Uswitch notes that not all suppliers can offer this³⁸. Smart meters are compatible with Economy 7 tariffs and fixed rate tariffs, and allow a household to change tariff without changing the meter³⁹.

Households that have come off an Economy 7 or Economy 10 tariff are under no rush: the Centre for Sustainable Energy states the meter will continue to function normally and, providing all electricity is on one circuit, there should be no difference⁴⁰. Refusing a meter has a tariff consequence, though: Citizens Advice notes that if you refuse a smart meter, you might find it hard to access all tariffs⁴. More detail sits on smart meters and time-of-use tariffs.

Prepayment: topping up without a shop visit

For prepayment households the smart meter changes the mechanics of paying. Ofgem lists among its benefits that a household can add credit automatically or without having to visit a shop in prepayment mode²⁵. Smart Energy GB states that prepay customers can top up online, by telephone or text message, or with a smartphone app, with no gas card or electricity key necessary⁴¹. National Energy Action describes topping up more easily via an app, online or still in the local shop⁴². With a smart meter in prepayment mode, credit can be added remotely from a mobile device at any time⁴³. A traditional prepayment meter, by contrast, needs a card or key topped up at PayPoint locations⁴⁴, and Ofgem describes topping up at a local Paypoint store or Post Office using the meter's key or card, or a barcode for smart prepayment meters⁴⁵.

There is a cost point specific to prepayment. With smart meters, suppliers can switch consumers from credit to prepayment mode without the cost of a new meter being added to their existing debt¹⁸. Where a household has a non-smart prepay meter and the supplier offers to fit a smart meter in its place, that should again be free²³. The DCC notes the meters are free to use and available for payment-on-account or prepay customers⁴⁶. See also smart prepayment meters and switching prepay to credit.

Where smart meters fall short: faults and dumb mode

A meter that has stopped communicating delivers none of the benefits above, and this is the largest practical qualification on the whole proposition. Ofgem states that a smart meter may stop recording the energy used, or may no longer send readings to the supplier²⁵. It lists the causes as losing connection with the supplier, losing connection after a change of supplier, or having been installed without being connected to the national communication system³². Citizens Advice adds that this might happen if you have an older type of smart meter and you switched supplier, or if your supplier has gone bust⁴⁷. Smart Energy GB notes that a first-generation SMETS1 meter may not be working in smart mode if the household switched supplier after installation⁴¹. Which? notes that smart meters can go dumb, particularly in older models⁴⁸.

The scale is significant. The Centre for Sustainable Energy states that around 10% of smart meters are in 'dumb' mode⁴⁹. Ofgem's own performance data for large suppliers showed a range between 2.6% and 16.3% of smart meters not operating in smart mode as at 30 June 2024⁵⁰.

Citizens Advice has recommended that suppliers be held accountable when smart metering equipment does not work, closing the accountability gap between energy suppliers and the DCC, including changes to DCC contracts if required¹⁹. Recovery is sometimes straightforward: Ofgem notes that a meter may work in smart mode again if a household changes tariffs or suppliers⁵². On switching generally, having a smart meter does not stop a household switching, and smart meters should make switching quicker as they can send information to a new supplier instantly²; with a SMETS2 meter the switch should happen without changes to readings, bill payments or supply⁵³. Only under exceptional circumstances would a supplier be expected to change a smart meter back to a traditional meter, and it may charge the costs if it agrees³³. Further detail sits on smart meter faults and troubleshooting and why a smart meter is in dumb mode.

Data, privacy and the right to say no

Smart meters are optional⁵, and it is a household's right to refuse installation³³. Which? confirms the right to refuse if you do not want one⁵⁴, as does Citizens Advice⁴. Where a traditional meter needs replacing because it is faulty or unsafe, replacement options may be limited³³. Where a household cannot have or does not want a fully functioning smart meter, a supplier may offer to install smart meter technology with the communications function disabled, so it will not send readings automatically⁵⁵.

On data, the position is narrower than many assume. Smart meters do not hold data that could be used to identify you, such as your name, address or bank account details⁵⁶. The DCC states that personal information such as name, address and bank details is not stored on the smart meter⁵⁷. Which? reaches the same conclusion independently: smart meters do not store or transmit personal information that could identify you⁵⁸. Smart meters do not use Wi-Fi to send data; they use their own secure data network⁵⁹, which is also why they do not affect broadband speed. What the meter does give the household is information: the DCC frames the data as putting you in control of your energy usage so you can take energy-saving steps⁶⁰. The detail is on smart meter data and smart meter security.

On health, Public Health England carried out an extensive programme of research and found that smart meters are safe and pose no risk to public health⁵⁹. Radio wave exposure is many times lower than from Wi-Fi and mobile phones and well within guideline levels⁶¹, and smart meters are built under UK and EU safety standards⁶².

What a smart meter does, and does not do, for independence

A smart meter does not generate, store or reduce energy. It does not disconnect a household from the grid or from a supplier. What it changes is visibility and optionality, and both matter to a household trying to take more control.

Visibility comes first. The in-home display shows how much energy is being used during the day³, and the meter's data lets a household take energy-saving steps⁶⁰. That information is the raw material for sizing solar, battery or a heat pump. Optionality comes second: access to dual-rate and time-of-use tariffs²⁵ is what lets a household shift load to cheaper or cleaner periods, and Smart Energy GB notes that smart meters allow suppliers to offer incentives to households that reduce energy use during peak hours, helping balance supply and demand and reduce pressure on the grid⁶³. Smart Energy GB describes smart meters as the foundation of a smarter energy system, helping integrate renewable power such as wind, solar and hydropower and reduce reliance on fossil fuels⁶⁴.

For generating households the interaction is specific. Smart meters are designed to work with solar panels, and a supplier should be able to offer one as part of the rollout¹⁸, though some suppliers are not yet ready to supply smart meters to customers with solar panels⁵⁹. Households claiming the feed-in tariff without a smart meter cannot take the readings required to calculate payments⁶⁵. See smart meters with solar panels and export metering.

The dependencies that remain are real and worth naming. The meter belongs to the supply relationship, not to the household: the supplier installs it, owns the billing, and sets the tariff, and except by switching a household does not control the tariff its supplier sets¹⁰. The communications sit on a national network operated by the DCC¹⁰, and when that link fails the household is back to manual readings³². The cost sits inside bills rather than outside them⁵. A smart meter is an enabling device for the wider picture set out across smart meters and home energy management, not a route out of the grid.