Energy bills increased at the start of 2025 and they’re set to climb even higher in April.
In a major blow to consumers, the Ofgem energy price cap will rise by 6.4% from April 2025.
Installing a smart meter could help you mitigate the damage of this hike and pay less for your energy, but not everyone is convinced by the technology.
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Smart meters send readings at regular intervals to your supplier and they can help you to closely track your energy usage and keep your costs down, but do these meters really do what they say on the tin?
If you currently have a regular meter, we look at whether you should make the switch.
Are smart meters good? The advantages
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 have to have half hourly readings if you wish to sign up for tariffs with off-peak rates – like EV tariffs – or want to take part in energy saving events. These tariffs/events could save you money.
Your smart meter 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 in on a regular basis (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.
Another useful benefit of smart meters 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 to figure out how much energy you use when you turn on certain appliances, and which habits and chores are costing you the most. It means you can adjust your usage to cut your bills.
Shifting your energy use may also allow you to be greener. During off-peak hours (typically weekends, working hours and overnight), the national grid tends to rely more on renewable energy production. Meanwhile, peak times usually see a larger reliance on fossil fuels – especially during the winter.
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 though, as it will ensure you do not pay over the odds for your energy.
What is the downside of a smart meter?
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 20 March 2025 showed 34% of homes were still yet to have one fitted.
The rate of domestic installations rose in the third quarter of 2024, increasing by 2.9% quarter-on-quarter, and 16% year-on-year to 710,000, according to the latest government data.
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. According to government data, 4.3 million smart meters weren't working properly by March 2024. This was up from the three million malfunctioning devices recorded the previous year. However, data from MoneySavingExpert suggests this could be an underestimate.
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 suppliers use to get readings. If you have a first generation meter, you will need to get a new one installed.
Are smart meters compulsory?
Smart meters are not compulsory. You are not legally required to have a smart meter installed. If your energy supplier offers you a smart meter, you can refuse the offer. However, you might have limited access to energy tariffs, including cheaper time of use tariffs, if you don't have a smart meter.
The pros of traditional meters
Many people choose 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).
The cons of a traditional meter
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 going up?
Energy prices have soared in the past three years. They increased by 54% in April 2022 from the quarter prior, and a further 27% in October 2022. While today’s prices have come down from the record highs, energy is still hundreds of pounds more expensive than in 2019.
At the start of 2025, energy regulator Ofgem imposed a 1.2% increase in the energy price cap for the first quarter of 2025 and to billpayers’ dismay, the cap will increase again for the second quarter of the year.
The average household that pays a dual fuel tariff with a direct debit will see their energy bills rise to a staggering £1,849 per year between April and June.
As the price cap is a limit on unit rates, it means that if you use more energy than the average household, you will pay more. If you use less, you will also pay less.
The price cap will be reviewed and updated for the period of July to September on 27 May.
Energy consultancy Cornwall Insight, who is well-regarded for the accuracy of their forecasts, says a period of respite could be on the horizon, predicting that energy bills will fall by 5% in the third quarter of the year.
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