Smart meters and your energy bill

A smart meter automatically records your gas and/or electricity usage and sends these readings to your supplier, typically once a day or more often. This replaces the need to submit manual meter readings or have your usage estimated between readings.

Most smart meters come with an in-home display, a small separate screen that shows your current usage in near real-time, often in both units (kWh) and an estimated cost. This can make it easier to see the effect of using high-draw appliances, like an oven, immersion heater, or tumble dryer, on your daily energy use.

There are two generations of smart meter technical standards in the UK: SMETS1 and SMETS2.

Earlier smart meters, installed roughly up to 2018-2019, used SMETS1 standards. Many; though not all; SMETS1 meters were not compatible with every supplier's systems, meaning that if you switched supplier, your SMETS1 meter could lose its "smart" functionality and revert to operating like a traditional meter, requiring manual readings again. Over time, a national programme has been enrolling SMETS1 meters into a shared network to restore smart functionality across suppliers, and most SMETS1 meters installed before 2019 have now been migrated, though some older or unmigrated meters may still be affected.

Newer smart meters use the SMETS2 standard, which was designed from the outset to work with any supplier via a shared national communications network. If you switch supplier with a SMETS2 meter, it should continue working as a smart meter without losing functionality.

If you're not sure which type you have, your current supplier can tell you, and it's a reasonable question to ask before switching if smart functionality matters to you.

The main practical benefit of a smart meter is that your bills are based on actual usage rather than estimates. Without a smart meter, suppliers estimate your usage between manual readings, based on your historical consumption; if your usage changes (for example, you start working from home more), an estimated bill can drift away from your actual usage until a real reading is taken, sometimes resulting in a larger-than-expected bill or credit adjustment later.

With a smart meter sending regular readings, this drift is largely eliminated, and bills should track your actual usage closely from one period to the next.

Smart meters are also what enable more granular tariffs, including Economy 7-style time-of-use tariffs and newer "smart tariffs" that vary the unit rate by time of day or even half-hour period, sometimes linked to wholesale electricity prices. Not every smart meter or supplier supports every type of time-of-use tariff; this is worth checking on the comparison result if a time-of-use tariff is something you're interested in.