The Benefits of Smart Meters

The California Public Utilities Commission (CPUC) has authorized the state’s investor owned utilities to replace conventional customer meters with Smart Meters in order to give consumers greater control over their energy use. Smart Meters enable a utility to provide customers with detailed information about their energy usage at different times of the day, which in turn enables customers to manage their energy use more proactively. 

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Smart Meters are being rolled out nationwide and internationally. According to the Edison Foundation, more than 8 million Smart Meters have been deployed by electric utilities in the U.S. and nearly 60 million should be in place by 2020. In California, the CPUC authorized Southern California Edison to install approximately 5.3 million new Smart Meters, San Diego Gas and Electric Company (SDG&E) 1.4 million electric Smart Meters and 900,000 natural gas meters, and Pacific Gas and Electric Company (PG&E) approximately 5 million electric meters and 4.2 million natural gas meters.  

The benefits of Smart Meters to customers, the state, and utilities, include: 

• Allows for faster outage detection and restoration of service by a utility when an outage occurs and therefore, less disruption to a customer’s home or business.  
• Provides customers with greater control over their electricity use when coupled with time-based rates, increasing the range of different pricing plans available to customers and giving them more choice in managing their electricity consumption and bills.  
  • Smart Meters enable a utility to measure a customer’s electricity usage in hourly increments.  
  • If a customer elects to participate in time-based rates offered by the utility, they have the opportunity to lower their electricity demand during “peak” periods (the peak period for most utilities are summer afternoons) and potentially save money on their monthly electric bill. 
• Allows customers to make informed decisions by providing highly detailed information about electricity usage and costs. Armed with a better understanding of their energy use, consumers can make informed decisions on how to optimize their electricity consumption and reduce their bills.  
  • Customers with Smart Meters today can access their prior day’s electricity usage through their utility’s website.  
  • In the near future, by installing an in-home display device that communicates wirelessly with a Smart Meter, a customer could monitor their electricity usage and costs in real-time (similar to the price and quantity displays on a gas pump), allowing them to adjust their usage instantaneously in response to changes in prices or system reliability events, for example by delaying the use of ahigh-energy appliance or shutting it off. This could be done manually or automatically by pre-programming the device or appliance.  
  • In the near future, it may be possible for a customer to receive automatic alerts (via emails or text messages) to notify them of when the electricity consumption exceeds a pre-determined threshold. 
• Helps the environment by reducing the need to build power plants, or avoiding the use of older, less efficient power plants as customers lower their electric demand.  
  • This is beneficial for all utility customers because the costs of building new power plants or relying on older, less-efficient power plants are eventually passed on to customers in retail rates.  
  •  Building power plants that are necessary only for occasional peak demand is very expensive. A more economical approach is to enable customers to reduce their demand through time-based rates or other incentive programs.  
  • When the utilities avoid the use of “peaker” plants to meet high demand, the environment benefits because peaker plants typically have higher greenhouse gas and other air emissions. 
• Increases privacy because electricity usage information can be relayed automatically to the utility for billing purposes without on-site visits by a utility to check the meter. This also results in lower operational costs for the utility, which means savings for customers as utility rates reflect the utility’s cost to operate. In addition, as technology improves and changes over time, customers can receive the benefit of those changes without the utility having to replace the meter itself.  
• Smart Meters are the first step toward creating a Smart Grid in California. With a Smart Grid, digital technologies are applied to every aspect of the industry, from generation, to transmission, to distribution, to the customer interface. This will help the grid sense what is happening to the energy flow, keep it in balance, and improve reliability and make the grid more resilient in the face of outages and other problems. 

Utility Smart Meters and Rates

Pacific Gas and Electric Company: Time-based rates are available to PG&E’s residential, agricultural, and commercial and industrial customers with a Smart Meter. 

On February 25, 2010, the CPUC adopted new rate structures for commercial, industrial, and agricultural customers of PG&E as part of an effort to implement dynamic electricity prices for all California consumers. These rates are designed to reflect the cost of electricity production during periods of high demand. When combined with PG&E’s Smart Meters, these rates will provide an opportunity for customers to lower their bills while improving system reliability and reducing greenhouse gas emissions.  

Beginning on May 1, 2010, large commercial and industrial customers will be placed on new Peak Day Pricing rates. Customers on these rates will pay different prices for electricity depending on the time of day. On the few hottest days of the year, prices for electricity used between 2 p.m. and 6 p.m. will increase further. However, PG&E will notify customers about these peak days one day in advance, so customers can plan accordingly. Beginning on November 1, 2011, medium and small commercial and industrial customers will begin moving to new Peak Day Pricing rates.  

Residential customers may elect to enroll in PG&E’s Smart Rate program, which is designed to encourage customers to reduce their electricity usage at during peak periods. Participants in Smart Rate may also elect a bill protection option for the first full summer of participation.  

Residential and small business customers can also enroll in PG&E’s Smart AC program, where they can reduce or shift their air conditioning in response to signals from the utility. In the near future, residential customers will have the option of enrolling in a Peak Time Rebate program, where they can receive a rebate for reducing their electricity consumption in response to demand response signals from the utility. 

Southern California Edison: Edison customers with Smart Connect meters will be able to participate in time-based rates. 

Edison will specifically implement a new Critical Peak Pricing (CPP) program for its large commercial and industrial customers starting in 2010 and is expected to expand CPP to medium commercial customers and agricultural customers by 2012. Additionally Edison will implement a voluntary real-time pricing rate (for all customers) by 2012 as well.  

Finally, residential customers (with Smart Connect meters) in Edison’s territory will also be able to participate in a Peak Time Rebate program. This program is anticipated to begin in late 2010. Alternatively residential customers in Edison’s territory (with Smart Connect meters) will be able to voluntarily enroll in CPP by 2012. 

San Diego Gas and Electric Company: SDG&E implemented Critical Peak Pricing for large and medium size commercial and industrial customers in 2008.  

For residential customers with Smart Meters, SDG&E will offer a Peak Time Rebate program by 2011. 

What is a smart meter?

Smart meters will do away with having to submit manual meter readings, (i.e. you reading your meter and submitting that to your energy supplier), and instead send those over the airwaves to help give you accurate bills.

You'll get an in-home display which means a useful and interactive way of seeing how much you're spending on a daily basis or even live in real time.

How do I get a smart meter?

Everyone will be offered an energy smart meter between now and 2025. You don't have to accept this offer — it is entirely optional and up to you as to whether you take the opportunity to have a smart meter installed.

There is no additional charge for having a smart meter installed. What that means is that over time, the cost of the installation program has been factored into your bill already.

Not everyone is currently eligible to have a smart meter installed. That may be down to the type of property you live in, or whereabouts in the country you are. It depends entirely upon your supplier and as they roll them out.

Can I switch with a smart meter?

The first generation of smart meters were rolled out up to the beginning of 2019. These are the meters that don't necessarily retain smart functionality if you decide to switch your energy supplier.

From January 2019, suppliers began to install the second generation of smart meters. With these meters you'll be able to switch supplier whilst also keeping your smart functionality. However, with a backlog of first-generation meters, it's possible some suppliers are still offering the older type.

There is also the suggestion that the first generation of smart meters will be upgraded over the airwaves to behave and act just like the second generation — in other words, you'll be able to switch and keep your smart functionality. We're yet to see any evidence of this is successfully working on any scale, though.

What is a smart meter and how does it work?

Smart meters are next-generation meters for both gas and electricity. They are a replacement for standard meters, which require you to track your own meter readings and submit them to your supplier to ensure accurate bills.

Smart meters work by using a secure national communication network (called the DCC) to automatically and wirelessly send your actual energy usage to your supplier. If you have a smart meter you don't need to rely on estimated energy bills or provide your own regular readings.

Smart meters also come with an in-home display. This display gives you near real-time information about your consumption and how much it’s costing you.

Pros and cons of smart meters

Like most forms of technology, smart meters have their advantages and disadvantages. If you're not sure about having a smart meter installed, it's worth weighing up the pros and cons of smart meters which we’ve listed below.

What are the benefits of a smart meter?

According to Smart Energy GB, there are several advantages of smart meters in your home:

• More accurate bills - one of the main advantages of smart meters is that they put an end to estimated bills. You’ll be charged only for the energy you use, without having to provide meter readings and/or have a stranger come into your home to read your meter. In fact, the latest smart meter statistics reveal that 95.5% of UK smart meters provide an accurate reading, reducing the chance of human error from manual readings.

• Bringing Britain's energy system into the 21st century - smart meters are part of the effort to create a smart grid, which is part of providing low-carbon, efficient and reliable energy to Britain's households.

• Exclusive energy tariffs - some suppliers offer cheaper energy deals to households with a smart meter, or those willing to have a smart meter installed.

How can I use a smart meter to save on my energy bills?

You can connect your smart meter to Utrack, which is Uswitch's free mobile app. With Utrack, you can track your energy usage around the home and see the direct impact your habits and lifestyle have on your bills. This will enable you to change your energy habits and keep your bills at a manageable level. You can find out more below.

What are the disadvantages of smart meters?

• Going "dumb" - the main downside of smart meters is that they can lose their smart functionality when you switch away from the supplier that installed them. If you're put off switching because you're keen on the benefits of your smart meter, you could miss out on any savings you could make by changing suppliers. Your smart meter is more likely to lose functionality if it's a first-generation SMETS1 smart meter instead of a newer SMETS2 meter (see below).

• Professional installation - your smart meter will need to be installed by a professional, which you may see as a disadvantage. Your supplier will send someone to install your smart meter and show you how to use it, and the whole process should take a couple of hours (during which you could temporarily lose power).

Are smart meters free?

It will not cost you anything to have a smart meter installed. Your energy supplier will arrange your smart meter installation, and the overall cost of the rollout is covered already in your energy bill – the same way that installation and maintenance of traditional meters are.

Can I switch energy suppliers if I have a smart meter?

The short answer is yes. However, upgrading the gas and electricity system of Great Britain is no small task, and that means there are some issues around smart meters and switching:

First generation/SMETS1 smart meters

The first generation of smart meters (called SMETS1), which were installed at the beginning of the smart meter rollout, can temporarily lose smart functionality when they switch energy suppliers. You can still switch if you have a SMETS1 smart meter. However, in some cases, your smart meter will stop sending data to your new supplier, which means you'll have to revert back to providing meter readings.

A SMETS1 upgrade has been planned that will make these meters multi-supplier compatible - they should be upgraded remotely with no need for a visit from an installer.

It's worth noting that even if your smart meter reverts to 'dumb mode' because you've switched to a cheaper energy supplier, it will still provide real-time updates on your consumption through the in-home display. This visibility provides powerful knowledge that many households find very useful.

Second generation/SMETS2 smart meters

These newer model smart meters are fully compatible with the DCC (the secure national network that the meters use to communicate with suppliers). This means if you have a SMETS2 meter you should have no issues with energy switching.

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Case study "I phoned up to find out information about switching my gas and electric and spoke to Adele who couldn't be any more helpful! I had a smart meter fitted with my current provider and was worried about how this would affect me switching and what would happen. Adele explained the process and what would happen, she also went into detail and explained about gas and electric bills with regards to the daily charge and unit charge and found me the best deal saving £370 a year! I would definitely recommend this service to anyone when renewing their gas and electric tariffs."

Hannah, Uswitch customer

How do I know if I have a SMETS1 or SMETS2 meter?

The rollout of SMETS2 meters didn't start until 2018, so if your meter was installed before then it's safe to assume you have a SMETS1 meter. Even after 2018, suppliers were still trying to use up their stocks of first-generation meters, so it's possible you still have a SMETS1 meter even if it was installed more recently.

The only definitive way to find out which type of smart meter you have is to contact the supplier that installed it.

Will a smart meter save me money?

A smart meter itself won't save you money, but having one installed can offer much insight into how to lower your bills, and you could get access to some cheaper energy tariffs.

Your in-home display lets you see how much energy you are using at different times of the day, week, month or year, which could help you cut your energy usage and your bills by highlighting ways you can be more energy efficient.

The display allows you to see how everyday tasks - such as making a cup of tea, using your tumble dryer or watching TV - impact not just your kWh consumption but also your energy bills. When your next gas and electricity bill arrives, there won’t be any nasty surprises and you can better manage your household budget.

To encourage faster roll-out of smart meters, some suppliers are offering discounted tariffs to homes that have a smart meter fitted (or are willing to have one installed), so at the moment it is possible to get cheaper energy just by embracing the benefits of a smart meter.

When will I get a smart meter?

All households in England, Scotland and Wales must be offered a smart meter from their energy supplier by the end of 2025. That does not mean you will have a smart meter by that date but it means you should be contacted (if you have not already) by your supplier about getting a smart meter.

Smart meter installation

Your energy supplier will work with you to arrange your smart meter installation, though they will likely work with a third party to fit the meter.

On the day of your smart meter installation, an engineer will need access to your existing gas and electricity meters. It should only take a couple of hours to install your new smart meters, and you’ll likely lose power for a short time while your old meters are being replaced.

Ofgem has enacted the Smart Metering Installation Code of Practice, which protects consumers by prohibiting sales attempts during installation (unless previous consent has been given by the household). Remember that smart meters are free to install, so you shouldn’t be asked to pay anything.

The code also ensures companies will properly explain how the smart meters work, and outline how households can use the data available to them to improve their energy efficiency.

Do I have to have a smart meter?

No – smart meters are not compulsory. If you don’t want a smart meter you are under no obligation to have one installed in your home.

You can refuse a smart meter or discuss any concerns you have with your supplier. Many energy companies have dedicated teams to handle questions about the technology and the smart meter installation process.

Can I have a smart meter on a prepayment plan?

Yes. Smart meters work in credit and prepayment form. In fact, prepayment customers may have more flexible payment options available to them with smart meters, including remote top-up facilities.

Are smart meters safe?

According to BEIS, all smart meters are subject to the same safety regulations and testing of any in-home technological devices, including baby monitors and mobile phones.

Smart meters are also covered by EU and UK safety legislation, which means they have undergone rigorous testing. And, according to Smart Energy GB, the smart meters used in Britain exceed every UK and EU safety standard.

Smart meters emit low radio frequency emissions in much the same way as other wireless devices. These allow energy suppliers to accurately track household energy consumption and will put an end to estimated bills.

According to Public Health England (PHE), the exposure to low-frequency emissions from smart meters is lower than that caused by appliances such as microwaves and TVs.

How to read a smart meter

One of the main benefits of smart meters is that you don't have to provide regular meter readings to your energy supplier. However, if your meter has lost its smart functionality or you want to take a reading for any other reason, you’ll need to know how to read a smart meter.

It should be easy to view your smart meter reading on your in-home display by selecting the 'meter reading' option from the menu.

If you can't find your smart meter reading on your in-home display or want to take a meter reading from the smart meter itself, your supplier should be able to talk you through the process over the phone, as it will differ depending on what type of smart meter you have.

Smart meters for renters and landlords

Smart meters are not just for homeowners – you can also have a smart meter if you’re a renter. As long as you’re the account holder for the energy bills, you are entitled to ask for a smart meter from your supplier without your landlord’s permission.

However, Ofgem recommends telling your landlord before getting a smart meter in a rented property. If your tenancy agreement says you need your landlord’s permission to structurally alter your property, “your landlord or letting agency should not unreasonably prevent it.”

If your landlord is the energy account holder and pays the gas and electricity bills directly, it’s up to him or her whether to install the smart meter in their rented property.

The same rules apply regarding smart meters for landlords. If you’re a landlord and you pay the energy bills, it’s your decision whether to install a smart meter in your rented property. If your tenants pay the bills, they are entitled to ask their supplier to install a smart meter.

Smart meters and solar panels

Some households with solar panels have reported that either their supplier's smart meter cannot currently support them, or have reported issues with the tracking of usage and generated energy.

If you have solar panels, ensure your supplier is made aware of this when they contact you about installation.

Can I get an accessible smart meter?

The Royal National Institute for the Blind (RNIB) has worked with Energy UK and geo, which is an energy technology business, to develop an Accessible In-Home Energy Display smart meter. This smart meter includes a range of accessibility features to help those who need them gain a better understanding and more control over their energy usage. It has been given the RNIB Tried and Tested accreditation, certifying that it meets the minimum requirements for blind and partially sighted people to be able to use it.

The displays can be requested from various suppliers, including:

• Bristol Energy

• EDF Energy

• E.ON

• Shell Energy.

Accessible smart meters have all the features of a standard smart meter, but also include the following functions:

• Text-to-speech functionality with adjustable volume

• Buttons that vibrate to confirm they have been pressed

• Three coloured LEDs to indicate electricity usage

• LED button to replay speech

• Large typeface

• TFT screen with a high contrast colour scheme optimised for visual impairment and colour blindness.

These accessible meters don’t cost customers anything, but they may not be available to you depending on your supplier’s accessible meter availability and general smart meter roll-out plans in your area. You can get in touch with your supplier to find out whether it can offer you an accessible meter.

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