Installing a smart meter could help you pay less for your energy, but not everyone is convinced by the technology.
While gas and electricity prices today are far below their peak during the 2022 crisis, energy bills remain much higher than they were before the pandemic.
The annual average price of energy, under the Ofgem energy price cap, is £1,720 between July and September for a household on a dual-fuel tariff paying by direct debit – 42% higher than it was during the winter of 2021.
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Smart meter pros and cons
If you currently have a regular meter, we explore whether you should make the switch to smart meters.
The pros of smart meters
The first big benefit of a smart meter is that it could help make your bills more accurate. It will send readings to your supplier on a daily or half-hourly basis, depending on what sort of deal you opt for.
For example, you will need half-hourly readings if you wish to sign up for tariffs with off-peak rates, like EV tariffs. A smart meter lets you take part in such energy-saving events too, which could save you money.
It will also save you from having to manually send meter readings to your supplier, as you would with a standard meter.
If you don't send readings regularly (i.e. at least once a month), your supplier will estimate your bills. This could mean you end up paying more than you have to. You won’t face this issue if you have a smart meter.
Another useful benefit is the in-house display you'll get alongside your smart meter. This small monitor will show you your energy use to the penny.
The gadget can help you figure out how energy-hungry your appliances are and what chores are costing you the most. It means you can shift your energy use to off-peak hours (typically weekends, working hours and overnight), and be greener, while cutting costs.
Finally, when it comes to switching, a smart meter can make life easier. It means you won't have to submit a final reading to your old supplier when you move house. That said, it's always worth making a note in case something goes wrong with the automatic readings.
When significant alterations to the Ofgem energy price cap occur, you won't have to send readings ahead of the changes to unit rates. It is still good practice to do so, as it will ensure you do not pay over the odds for your energy.
The cons of smart meters
The government had been aiming to offer a smart meter to every home by mid-2025.
However, figures released by the Department for Energy Security and Net Zero (DESNZ) on 28 August 2025 showed 31% of homes were yet to have one fitted by the end of June 2025.
The rate of domestic installations grew in the second quarter of 2025, increasing by 3.3% quarter-on-quarter to 740,000, according to the latest government data. In total, nearly 40 million households in Britain now have a smart meter.
That's not to say all homes want one fitted. Many people have refused to get a smart meter due to concerns about the amount of insight this gives energy suppliers.
There have also been concerns around smart meters being targeted by hackers, but there is no evidence that this has happened.
For households with a smart meter, the biggest issue comes when the meter malfunctions.
Common issues included suppliers not receiving readings, the meters not displaying information to consumers, or both. Some have not been working because they haven't been commissioned properly at the point of installation.
Many of the other meters had malfunctioned because they were first-generation smart meters, and therefore couldn't connect properly to the centralised infrastructure that suppliers use to get readings. If you have a first-generation meter, you will need to get a new one installed.
Can you get compensation if your smart meter is faulty?
While Ofgem says 90% of the smart meters in Britain work as intended, errors and faults can occur.
At the moment there is no way to claim compensation if your meter breaks down. However, this is set to change if new rules proposed by Ofgem pass a consultation.
Ofgem’s proposal is that consumers with a smart meter should be entitled to £40 of compensation if their smart meter fails in particular ways.
This includes compensation if your smart meter fails due to a fault within the supplier’s control, and if it does not operate in smart mode and is not fixed within 90 days (including connectivity issues).
Compensation could also be awarded if you have to wait more than six weeks to get a smart meter appointment, or if you report a problem with your smart meter and the supplier does not provide a resolution plan within five working days.
If the rules pass the consultation, the regulator aims to have the new smart meter standards in place from early 2026.
Are smart meters compulsory?
Smart meters are not compulsory. You are not legally required to have one installed, so if your energy supplier offers you one, you can refuse. However, this might limit your access to energy tariffs, including cheaper time-of-use tariffs.
The pros of traditional meters
Some people have chosen to remain on traditional meters. This could be because they want to control the information they hand over to their energy supplier.
It could also be down to the type of meter you have. For example, economy 7 and economy 10 meters have cheaper rates than standard meters if you live in a single fuel household. Suppliers no longer fit these meters, and only a few offer tariffs for them.
If your meter is accessible and you're willing to submit readings every month, then it will cost no more than if you had a smart meter — although you won't get the same insights into your usage or have access to off-peak rates.
The cons of traditional meters
The flipside of a traditional meter is that if your meter is quite hard to get to, you may not be able to submit readings to your supplier on a regular basis. In this instance, you may end up paying more than necessary, as your supplier will have to go off estimates rather than your actual usage data.
You can get your money back if you can show you've overpaid, but it may take weeks or even months to come through. You could also underpay with estimated bills, which might lead to you having to fork out a hefty sum in the future.
Do smart meters cost more?
Installing a smart meter will not make your energy cost more. The unit rate you pay for your energy will remain the same after you get a smart meter.
Consumers don’t normally have to pay to get a smart meter installed.
Smart meters allow you to better understand how much energy you’re using. Getting a smart meter won’t automatically lower your bills, but households with one are more likely to access some of the cheapest deals on the energy market.
For example, if you have enough flexibility to be able to shift your energy use to off-peak times of the day, you could reduce your bills. But the type of energy deal that allows you to access these cheaper rates requires a smart meter because it tracks wholesale prices on a half-hourly basis.
So, from a price perspective, it makes sense to opt for a smart meter. However, they may not be easy to install in certain homes – especially older properties. If you live in such a household, it may be best to stick with your existing meter.
Are energy bills falling?
Energy prices have soared in the past three years, but have started to come back down, though they are still much higher than pre-pandemic averages.
The price cap is set to increase by 2% in the last quarter of the year. But where will energy prices go next?
Predictions made by energy consultancy Cornwall Insight, who are well-regarded for the accuracy of their price cap forecasts, expect the price cap will fall by 2.4% in the first quarter of 2026 to £1,712.20 per year.
Similarly, energy suppliers EDF and British Gas also predict that energy prices will go down in January 2026, with both firms expecting a fall of 0.5%.
These predictions should be taken with a pinch of salt, though, as it is incredibly difficult to predict energy prices so far in the future.
For more information on the future of the energy market, read our article on whether energy prices will go down.
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