Do Smart Meters Save Money? We Find Out

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It’s quite common to see around or to hear from your friends and family about getting a smart meter installed. There are many myths and misconceptions about the device and one of these was if a smart meter actually saved you money or not? 

At a time where saving money, particularly with rising energy bills, is more important than ever – understanding what saves you money or not is something that we all need to understand. 

This article will let you know about all the ins and outs of smart meters and looks at trying to clear up some of the common things you’ll hear about them – giving you the truth from the fiction. 

Do Smart Meters Save Money

What Exactly Is A Smart Meter Anyway?

Smart meters seemingly came out of nowhere. One day, it was almost as if there was a report on the news about their introduction and suddenly we were all asked to get one installed. 

Smart meters were originally introduced to the UK by the coalition government in 2011 but the technology was developed long before that and other nations within the European Union and around the world were using smart meters. 

Their aim is to record accurate readings of your energy use as normal energy meters will do, but they differ from a regular meter because they send these readings directly to the energy provider using a wireless network – this is a function known as “smart mode”. 

Smart mode is the only function that will send readings directly to your energy provider, but some energy suppliers do not currently have meters with this function, so it’s always best to check. 

The alternative to this is a function known as “dumb mode”, which is a smart meter with all communication methods disabled.

Some people opt for these to be installed to get energy suppliers off their backs when they’re being pressured to have a smart meter.

Commonly, smart meters have a display that allows you to see and check how much energy you are using – and some can tell you the cost of this, meaning you can try to reduce your cost by reducing your energy usage throughout the day. 

The network works in a similar way to how a mobile network works and the idea is that you will not need a technician to come to your house and read your meter as often, if at all, and does away with estimated bills due to their accuracy. 

How the meters communicate via a hub will depend primarily on your geographical location but whichever method is provided, the idea remains the same as to their use. 

It’s important that we differentiate a smart meter from an energy monitoring device.

Energy monitoring devices can show you energy usage in real time, but often these figures aren’t exactly accurate and the biggest difference is that they do not send the data to your energy provider. 

Does This Mean I Have To Have WIFI For A Smart Meter?

No, there’s no need to have broadband/Wi-Fi in your property for smart meters to work correctly – their technology is similar to that of a mobile network and functions on its own.

Do I Have To Have A Smart Meter Installed?

Absolutely not. There has been a common misconception about the law on this, and there’s no way an energy supplier can force you to have a smart meter installed.

If for some reason, your supplier is demanding that you do – you should consider contacting the Citizens Advice Bureau. 

It’s understandable why energy suppliers try to get people to have a smart meter installed.

They normally have targets that they are asked to meet every year on installation numbers and try to take “reasonable measures” to increase the number of customers with installed smart meters. 

But there is nothing in law that says you must have a smart meter installed. Having said this though, if you have a meter that has aged badly and must be replaced – you might have to consider getting a smart meter installed.

This is because some energy suppliers will not replace a meter with an old one and your current meter might be a safety hazard.

You might also struggle to get a competitive cost on energy with other suppliers, if you were looking to switch for any reason.

Normally, this is because the best prices are being given to customers with existing smart meters, or those that agree to have one installed after switching. 

Do Smart Meters Save You Money At All?

Perhaps the biggest misconception with smart meters is that they’ll save you money when you have them installed, and it’s simply not the case. Saving money on energy will only be through your own usage and keeping accurate readings from the meter. 

A smart meter can help you keep track of your meter readings more easily and if you have an IHD (in-home-display) on the smart meter, which most do, you’ll be able to see the amount of energy currently being used, along with the costs. 

If you notice this is running high, you can take steps to reduce the amount of energy being used and potentially wasted.

If you’ve taken all reasonable steps to reduce your energy usage and the meter is still running high, it might be beneficial to call out an engineer.

If you rent, you can ask your landlord or housing association about the energy within the property and try and assess where the energy is being used. 

Smart meters were originally aiming to reduce energy consumption and energy bills by £250 a year per customer by the year 2034 – but with rising energy costs, this seems unlikely. 

The bottom line is, whatever meter you have in your home, the costs will come from having accurate readings and reducing your energy use.

If you are being overcharged for your energy use, you should consider speaking with OFGEM or the Citizens Advice Bureau. 

Are Smart Meters Free To Have?

Energy suppliers cannot charge you to have them installed, but they’re not necessarily free as such because you’ll pay for them over time, the same way you’d pay for a normal meter to be installed. 

The Bottom Line

Smart meters do not necessarily save you money but they can help you save money through more accurate readings, not paying for call out charges for meter readings and allowing you to keep an eye on real-time energy use. 


About Emma Healey

Emma is a recognised family finance and budgeting expert and founder of Mum's Money. Her advice has been featured in Readers Digest, Yahoo Finance, Lifehacker, The Simple Dollar, MSN Money and more.