Smart meters are the future of gas and electricity meters. Placed in homes and in businesses, they help keep track of your gas and electricity useage, eliminating the need for meter readings.

The government plans for all homes and business in the UK to have a smart meter by the end of 2020, giving you the opportunity to make more informed decisions about your energy costs, but how do they work and is there a cost?

How they work

Like a traditional meter they measure the total energy used -the benefit of a smart meter is that they can also tell you when you used the energy and how much it cost. It can then transmit that information directly to your energy supplier, eliminating the need for meter readings. That means no more estimated bills!

By installing a smart meter you will be able to see real-time information on your energy consumption, that means seeing how much you’re using and how much it costs as it happens. Over time you’ll be able to manage your energy usage and hopefully save money.

The cost

The cost of installation, which begins next year, is £215 per household. Customers will be charged an annual amount on their bills to cover the cost, which has been estimated to peak at £11 in 2017. This cost has caused concern with some MPs who have warned that smart meters will only save consumers 2% on their annual bills. With the average annual household energy bill coming in at £1,328* that would mean a saving of £26 after installation costs. However, this £26 saving is based on consumers actively changing their energy use once they have the smart meters.

Do you have a choice?

If you are approached before the roll-out (2015) then yes, you definitely have a choice. Once roll-out starts you should still have a choice, however, if you have been contacted to changed because your current one needs replacing then you should as it could be a safety hazard.

It’s still very early days in the rollout and there are some things to consider such if you get a smart meter before the official roll-out will you have to get your smart meter changed or upgraded?**.

Time to make a decision?

You don’t have to decide whether you want one now, but it’s definitely worth considering. To make it worthwhile you and those that live with you need to work together to make it effective – monitor the meter, be aware of the spikes in energy and make proactive changes to save money. While there is an annual cost for the smart meter, it is small in comparison to the potential savings you could make. The roll-out will take five years, so you have time think about it. In the mean time, why not check out our money saving article.

* Public Accounts Committee
** Which?

Image by Claudio Jule