Supporting detail:

Smart meters

Smart meters are the next generation of gas and electricity meters. They are part of our plan for upgrading the UK’s energy system.

We aim for all homes and small businesses to have smart meters by 2020. Energy suppliers will be required to install smart meters and take all reasonable steps to install them for everybody.

Consumers with smart meters will be offered an in-home display (IHD) that lets them see how much energy they are using and what it will cost. This will let them have more control over their energy use and help them save energy and money.

Between now and 2020 energy suppliers will be responsible for replacing over 53 million gas and electricity meters. This will involve visits to 30 million homes and small businesses.

Most householders will have smart meters installed by their energy company between 2015 and 2020, although some energy companies are starting to install smart meters now.

Benefits

Smart meters will give consumers:

  • near real-time information on energy use, expressed in pounds and pence
  • the ability to manage their energy use, save money and reduce emissions
  • an end to estimated billing – people will only be billed for the energy they actually use, helping them to budget better
  • easier switching – it will be smoother and faster to switch suppliers to get the best deals

Smart meters also give suppliers access to accurate data for billing, removing the need to manually read meters.

We are making sure consumers will be protected when smart meters are installed in properties. Our provisions to ensure this mean:

  • there will be no sales during the installation visit
  • installers must provide energy efficiency advice as part of their visit and they will need permission before the visit if they will want to discuss their own products
  • consumers’ privacy will be protected and they will have control over their smart meter data
  • we have a programme in place to build confidence in our system and improve consumers’ understanding of how smart meters work

A smart meter can work in pre-payment or credit mode. Pre-payment customers will see some particular benefits from having a smart meter. For example:

  • energy suppliers may offer new and more flexible ways of topping up their meter, including the ability to top up over the phone or online
  • the smart meter can be set so that consumers do not run out of credit at night and won’t be left without power when the shops shut.

Find out more by visiting Smart meters: a guide.

Roll-out of smart meters

The roll-out of smart meters will take place in 3 stages.

Policy design stage

The policy design stage ran between July 2010 and March 2011 and was managed by the Office of Gas and Electricity Markets (Ofgem) on behalf of DECC.

Find out more about the decisions taken in this stage.

Foundation stage

The foundation stage began in March 2011. We are working with the energy industry, consumer groups and other interested parties to ensure that all of the necessary groundwork is completed before energy suppliers start the process of providing smart meters to most of their customers. The foundation stage is crucial to the successful roll-out of smart meters across Great Britain and will let industry:

  • build and test systems
  • learn what works best for consumers
  • learn how to help people get the best from their meters

An important milestone for this stage was the setting up of the Data and Communications Company, which will link 53 million smart electricity and gas meters in homes and small businesses with the business systems of energy suppliers, network operators and energy service companies. The Smart Meters Communications License was granted in September 2013.

Main installation stage

The main installation stage, when most consumers will have smart meters installed, will start in late 2015. Suppliers are obliged to complete the roll-out by the end of 2020 and they will decide how they deploy smart meters to their customers.

Costs and funding

Over the period to 2030, the installation of smart meters will provide £6.2 billion net benefits to the UK: the programme will cost £10.9 billion and provide £17.1 billion in benefits. The cost-benefits analysis can be found in our latest Impact Assessment.

Latest progress

The Smart Metering Implementation Programme requests (on a quarterly basis) data relating to the number of smart and traditional meters installed from the larger energy suppliers. The latest quarterly statistical release is available.

Stakeholders we work with

The smart metering programme works with a wide range of organisations, including large and small energy suppliers, networks, consumers groups and regulators. More information about their work is contained in the links of some of the organisations we work with, below:

How we work with stakeholders

We have set up working groups for representatives from industry, consumer organisations and other bodies and they are as follows:

  • Smart Metering Steering Group (SMSG)
  • Smart Metering Deliver Group (SMDG)
  • Implementation Managers Forum (IMF)
  • Technical & Business Design Group (TBDG)
  • Regulatory Group (RG)
  • Operational Delivery Group (ODG)
  • Transition Security Experts Group (TSEG)
  • Transition SMKI PMA Group (TPMAG)
  • Benefits Monitoring & Review Group (BMRG)

You can find further details on how we work with stakeholders on the Information for Industry webpage.

Further information

Consultations

DECC has published a number of public consultations regarding the Smart Meters Programme.

Impact assessment

The Smart Meter programme carries out regular impact assessments, which we will update as the programme develops. The latest Impact Assessment is available here:

Smart meter roll-out for the domestic and small and medium non-domestic sectors (GB) (published 30 January 2014)

Evidence and research

The evidence supporting the roll-out of smart energy meters in Great Britain is based on international and national research. Energy suppliers that are rolling out smart meters and consumer groups with an interest in the programme have also carried out related research.

DECC monitoring, evaluation and consumer research

Our approach to tracking the progress of the Programme and its costs and benefits is underpinned by our Monitoring and Evaluation Strategy.

DECC has already produced the following research for the Smart Meter programme:

UK evidence

Ofgem has produced the following research on smart meters:

International evidence

Research on smart meters from across the world includes:

Europe

US