Can a smart meter really save me money?

Smart meters monitor how much gas and electricity you use with the aim of helping you save money in the long run. But how do smart meters work and can they actually help lower your energy bills?

What is a smart meter?

Smart meters replace traditional gas and electricity meters. However, instead of simply recording how much energy you use, smart meters automatically send the data back to your energy provider, which also means an end to estimated bills.

If you’re given a smart meter, it will come with a small device with a screen that shows you how much energy you’re using, as you use it. You can also see how much you’ve used and spent that day, week or month.

If you use gas and electricity, you’ll be offered a smart meter for each fuel type. The electricity smart meter will send ‘live’ updates to your provider using a wireless network, while the one for gas will send updates every 30 minutes.

Why am I being offered a smart meter?

The smart meter programme is a government initiative aimed at promoting energy efficiency in homes and small businesses.

Originally, the plan was for all homes to have a smart meter by 2019, this has since changed, and the aim is for 75% of homes and 69% of small businesses to have one by 2025.

Do I need to have a smart meter?

No, your energy provider may offer you a smart meter, but you’re not obliged to accept. But remember, if you stick to your traditional meters, an engineer will need to come and read them in order to get an accurate measure of the gas and electricity you’re using. In the meantime, you’ll continue to pay bills based on estimates – which could mean you pay more than you need to.

You should also bear in mind that some tariffs are only available to households with a smart meter, so you could be missing out on some of the cheapest energy plans on offer.

Are smart meters free?

There is no separate charge to install a smart meter in your home. Instead, suppliers will include the cost of the scheme in their overall expenses, which will then be shared between all customers.

What are the benefits of a smart meter?

The greatest benefit of a smart meter is that your energy bills will be based on your actual usage rather than estimates. This helps ensure you only pay for the gas and electricity you use. Plus, because your smart meter shows you how much energy you’re using, you can monitor what you’re spending, which can help you budget.

Smart meters can also help energy companies assess how much electricity is needed, allowing them to effectively meet times of high demand and reducing power at other times – making the network more efficient overall.

Another benefit is that if you have a prepayment meter, you’ll also be able to top-up your account via your smart meter any time you need.

What are the cons of a smart meter?

Smart meters aren’t suitable for all homes or businesses. As they rely on wireless networks to send data to your provider, if you live in an area with a poor mobile signal, a smart meter might not work. Similarly, if your home has very thick walls or you live in a large block of flats, a smart meter may struggle with signal quality.

The first generation of smart meters stopped working when you switched from one energy supplier to another. Most but not all were reconnected. As smart meter technology continues to improve, these technical problems should decrease.

As with all technology, smart meters can stop working after a while. With that in mind, if you have a smart meter, it’s worth keeping an eye on it for any sudden fluctuations in readings or if it stops working altogether. If this happens, you should speak to your energy provider.

Do you get cheaper electricity with a smart meter?

The unit cost of your gas and electricity will depend on the tariff you choose. If you have a smart meter, you may be able to choose from more tariffs compared to someone without one. This could mean you benefit from plans offering cheaper gas and electricity.

Do smart meters actually help you save money?

As smart meters send accurate readings to your energy supplier, you may see lower bills than before, as they’ll be based on actual usage and not estimates.

Otherwise, it’s not a straightforward yes or no answer. A smart meter by itself will not automatically save you money, but it can help you cut costs depending on how you choose to use the data it provides. For example, a smart meter can:

  • Give you an insight into what appliances or devices use the most energy, this may push you to use them at off-peak times.
  • Encourage you to buy more energy efficient appliances.
  • Provide you access to a wider range of tariffs that may only be available to smart meter customers.

In theory, energy suppliers are also saving money by reducing the number of in-person meter readings needed. This should help reduce some of their expenses, with the savings passed on to customers.

How can I save money on my energy bills?

If you’re trying to keep bills down, it can be difficult to know where to start and the changes that you do implement might not feel as if they’re making much of an impact.

However, lots of little changes can add up and help lower overall costs. Tips include:

  • Putting some high-energy appliances on a timer so that they come on at off-peak times.
  • Draught-proofing any gaps near windows and doors.
  • Turning down your thermostat by one degree.
  • Insulating your hot water cylinder.

For more advice about how to save on bills and improve energy efficiency, consider these 11 ways to save energy in the home. You can also find out what the average household pays for gas and electricity to see how you compare, and for help with costs, here’s advice about what to do if you’re struggling with bills.


Personal Finance

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