Is a Smart Meter Worth It?

Smart meters are promoted as a way to save money, which overstates what a measuring device can do. They are genuinely useful, and the usefulness lies mostly in accuracy and access rather than in savings themselves.

What it actually does

Sends readings automatically to your supplier, usually every half hour for electricity and daily for gas, though you can restrict how often.

Ends estimated bills. This is the most concrete benefit. Estimated billing means paying either too much or too little for months, followed by a correction arriving as an unexpected bill or an unexpected credit, neither of which is welcome.

Ends manual readings, including crawling into cupboards with a torch and a phone camera.

Powers an in-home display showing current usage in watts alongside cost per hour, day or month.

Enables time-of-use tariffs, which charge different rates at different times of day. This is where the real money is, and it is impossible without a meter that records when electricity was used rather than only how much.

What it does not do

It does not reduce your energy use. It is a measuring instrument, and the saving comes entirely from what you do with the information it provides.

The evidence on behavioural savings is modest. Studies of in-home displays generally find reductions in the region of a few percent, concentrated in the first months and tending to fade as the novelty wears off and the display becomes part of the furniture.

A few percent of a typical annual bill is real money. It is not the transformation the marketing implies.

Where the actual savings are

Time-of-use tariffs are the genuinely significant case.

These charge substantially less during off-peak hours, typically overnight, and sometimes more during an evening peak. For a household able to shift consumption, the difference is large rather than marginal.

Shiftable loads include:

• Electric vehicle charging, by far the largest, and the reason most EV owners move to such a tariff
• Dishwashers and washing machines on a delay timer
• Tumble dryers
• Storage heating and hot water tanks
• Home battery storage, where fitted

A household with an electric car can save several hundred pounds a year simply by charging overnight on the right tariff. A household with no shiftable load and evening-heavy usage can end up worse off, because the peak rate is higher than a flat one would be.

The meter is the entry requirement for that choice. Whether the choice pays depends entirely on the shape of your usage.

The in-home display

The display is the part people either use constantly or ignore within a fortnight.

Its genuine value is making invisible costs visible. Watching the reading jump when the kettle, the oven or the tumble dryer comes on is the fastest way to learn which appliances actually matter, and that knowledge outlasts any interest in the display itself.

It is also good for finding unexpected baseline consumption. Turning everything off and seeing what the meter still reads reveals standby loads running continuously, which for a house full of devices can be 20 to 40 watts costing real money across a year.

The catches

First-generation meters and switching. Early meters used a supplier-specific system and frequently lost smart functionality when customers switched, reverting to manual readings. Second-generation meters use a shared national network and are designed to work across suppliers. Many older meters have since been upgraded remotely, but it is worth asking which generation is installed.

Signal. The meters depend on a communications network that does not reach everywhere. In some rural areas, and in some flats where the meter sits in a basement cupboard, the connection is unreliable and the meter reverts to being a slightly more expensive ordinary meter.

Prepayment mode. Smart meters can be switched remotely between credit and prepayment. That has been a genuine source of concern, and the rules governing when suppliers may do this have been tightened considerably.

Installation. Free, and it requires somebody at home for a couple of hours with the supply interrupted briefly while the work is done.

Privacy

Half-hourly consumption data does reveal patterns: when a home is occupied, when people wake and sleep, when the house is empty for a fortnight.

In Great Britain you can choose how often your supplier collects readings, including restricting collection to monthly, though some tariffs require half-hourly data to function. Suppliers need your consent to use detailed consumption data for marketing purposes.

It is a reasonable thing to weigh, and for most households a modest concern next to the data already generated by phones, cards and cars.

Getting the most from one

If you have a smart meter and are not on a time-of-use tariff, that is the first thing to look at, particularly if you have an EV, a heat pump or electric heating.

If you are on a flat tariff and have no shiftable load, use the display for a fortnight to identify the largest appliances and the standing baseline, then act on what it shows. After that the meter is mainly doing its quieter job of making sure the bills are correct.

The honest verdict

Worth having if you want accurate bills without submitting readings, and particularly worth having if you can shift usage to off-peak hours, where savings are substantial rather than marginal.

Not worth expecting a large saving from the display alone. The meter tells you what you are spending. Spending less remains a separate decision.