Smart meters

DOI: https://doi.org/10.58248/RR88

What is a smart meter?

A smart meter is a gas or electricity meter that allows energy consumption data to be monitored in real time by customers and energy suppliers. Smart meters allow two-way communication and can remotely accept instructions from suppliers to update tariff information or switch payment mode.

Smart meters are designed to support a flexible, decarbonised energy system, and can provide consumers with access to cheaper energy tariffs. The government initiated smart meter rollout in Great Britain (GB) in 2011. Since then, there have been considerable delays, as well as concerns about faulty meters, energy suppliers’ obligations and public engagement with the programme. As of September 2025, 70% of all meters in GB were smart meters.

The benefits of smart meters for customers include:

• Automatic meter readings
• More accurate billing
• Access to potentially cheaper smart tariffs
• Automatic/easier top-ups for prepayment customers
• The ability to monitor energy use and spending more easily

The benefits of smart meters for the energy system include:

• The ability to save suppliers money on manual meter readings
• More accurate data and predictions on energy use
• Enabling flexibility and demand-side response (shifting energy demand away from peak times)
• Better balancing of demand with the variable supply of renewable energy

The smart meter rollout

Background and pre-2020 rollout

The smart meter rollout in Great Britain began in 2011. The government required energy suppliers to take “all reasonable steps” to install smart meters in all homes and small businesses, with a target of 50 million installed by the end of 2020. The rollout occurred in stages:

1. Initial rollout of a simpler smart meter design defined by a Smart Meter Equipment Technical Specification (SMETS1).
2. Licensing of a central Data Communications Company (DCC) to create the digital infrastructure to manage smart meter communications.
3. Creation of Smart Energy GB, a national consumer engagement body.
4. Rollout of DCC-enabled SMETS2 meters, alongside the enrolment of SMETS1 into the DCC network.

The DCC digital infrastructure was designed to enable interoperability, allowing customers to switch energy suppliers without losing smart mode functionality. SMETS2 meters are all DCC-enabled, but SMETS1 meters had to be enrolled into the DCC system to make them interoperable. Before the DCC, 70% of SMETS1 meters lost smart mode functionality, and acted as traditional meters, when customers switched energy supplier.

The Wide Area Network

By the end of December 2020, there were 23.6 million smart meters installed (PDF) (42% of all meters), of which 19.1 million (34%) were operating in smart mode.

A 2018 National Audit Office report on the rollout of smart meters noted that:

• The delay in the rollout of the DCC and SMETS2 meters led to missed targets
• There were higher-than-planned numbers of interoperable SMETS1 meters that could be operating in traditional mode
• The pace of the rollout increased the risks to value for money, technology suitability and customer satisfaction

Rollout between 2020 and 2025

In 2020, the government set a new target of completing the smart meter rollout by 2025. It said it would achieve this by introducing an annual target framework for energy suppliers based on a trajectory to 100% coverage with tolerance levels. In 2023, the government lowered the minimum allowable coverage by 2025 to 74.1%.

In 2023, a Public Accounts Committee report on the rollout of smart meters noted that:

• The smart meter rollout was too slow, with customers still using traditional meters much less interested in obtaining a smart meter
• There was lower uptake of smart meters in London, remote areas of Scotland and rural areas of England
• 0.75% of homes sat outside the WAN coverage area
• Three million (9%) of smart meters were not fully functioning, although about half of these faulty meters were described as having “transitory” issues that were resolvable
• Existing supplier incentives led to the installation of new meters being prioritised over the replacement of faulty ones

Current smart meter rollout statistics

In September 2025, there were 40 million smart meters installed (PDF) (70% of GB meters), with 36.7 million (64%) operating in smart mode. Ofgem opened compliance engagement into six energy suppliers over potentially missing their annual installation targets and suppliers paid £10.8 million to Ofgem for missed 2022 targets.

Government analysis of the cost and benefits of the smart meter rollout until 2024 reported a net benefit of £3.7 billion. The highest costs of the programme came from the DCC and installing the meters. The highest benefits came from reduced customer energy use and supplier meter readings. The costs of the smart meter rollout are regulated by Ofgem and are passed on to consumers in energy bills.

Considerations post-2025

The government has proposed a new target of completing the smart meter rollout by the end of 2030.

The government set out its plans in two main documents:

• Smart metering policy framework post 2025. This was a consultation that closed in October 2025.
• Enhancing the smart meter installation journey towards Clean Power 2030. This was a call for evidence that closed in October 2025.

The topics covered by these documents include:

• ensuring that smart meters are working, and that there is good network coverage
• completing the smart meter rollout, reducing delays and constraints
• integrating smart meters with other low-carbon technologies

Faulty smart meters

Government proposals include a 90-day time limit on suppliers to ensure smart meters are operating in smart mode, and annual milestones for suppliers on fixing and replacing faulty and out-of-date smart meters.

Ofgem is consulting on introducing further standards to increase customer satisfaction.

Network coverage

The National Audit Office estimates that the phaseout of the 2G and 3G networks could risk 7 million smart meters losing coverage. There are reports of issues with network connection in northern England and Scotland, which use long-range radio signals. In response, the DCC is implementing a migration plan to use the 4G network, which would require some communications hubs to be upgraded.

The government delayed the phaseout of the Radio Teleswitch Service in June 2025 to allow more time for the 1% of households using these meters to upgrade.

The government is supporting virtual WAN proposals, which would allow customers outside of the WAN coverage to use their home Wi-Fi network to connect their smart meters. Citizens Advice notes that there are risks around linking energy supply and internet connection for those on prepayment meters.

Speeding up smart meter installations

The current target framework for the smart meter rollout ended in 2025. The government proposes that suppliers should take ‘all reasonable steps’ to achieve 100% smart meter coverage by the end of 2030 and that suppliers should submit an annual deployment plan specific to their customer base. It suggests that removing the yearly targets creates more flexibility for energy suppliers and considers the greater variety of tasks involved, including:

• Fitting new smart meters
• Replacing and fixing faulty and traditional mode meters
• Replacing and upgrading meters to 4G network capability
• Introducing technological improvements

The government says it will consider less flexible measures to ensure the 2030 target is met if progress remains slow.

Flexibility

Smart meters give customers the option of using flexible tariffs, which allow them to shift demand away from peak times. This cuts costs and emissions while enhancing smart technologies (PDF) like electric vehicles, heat pumps and home batteries. Government suggests that shifting consumer demand to match renewable generation would:

• Reduce the need to build new electricity generation
• Optimise the use of existing network infrastructure
• Free up more grid capacity
• Reduce reliance on unabated gas generation

Government has set a target of 51 to 66 gigawatts of flexible capacity by 2030. Cornwall Insight calculates that households could save over 52% of wholesale electricity costs by 2040 via flexibility services.

Integrating smart meters with low-carbon technologies

The government discuss the need to integrate smart meters with low-carbon technologies. One method is supporting energy companies to share data on smart meter or low-carbon technology installations to then help promote smart tariffs.

Government’s Smart Secure Electricity Systems Programme aims to establish a framework for Energy Smart Appliances, which work with smart meters to automatically adjust their energy use based on price, current demand and carbon emissions.

Market-wide Half Hourly Settlement

The rollout of smart meters is crucial for the Market-wide Half Hourly Settlement (MHHS). The MHHS is a collaborative project between Ofgem and the energy industry that is introducing consumer billing which charges per half hour. This helps suppliers to offer flexible tariffs in which electricity prices change over the course of the day.

Smart meter rollout outside GB

Northern Ireland

Energy policy is largely devolved in Northern Ireland. No smart meters have been installed in Northern Ireland yet. The Department for the Economy published a consultation on smart meter rollout in Northern Ireland in October 2024, after determining the potential benefits through a cost-benefit analysis.

European rollout

EU member states were requested to target 80% smart meter rollout by 2020, but the specifics were left to the member states themselves. As of 2024, over half the EU members states had rolled out smart meters to more than 80% of their populations (see  below). Smart gas meter rollout is lower than smart electricity meter rollout in Europe

Source: https://aegis.acer.europa.eu/chest/dataitems/992/view

Acknowledgments

POST would like to thank the following people for kindly giving up their time during the preparation of this article:

• Simon Elam, Director of the Smart Energy Research Group, University College London
• Dan Stone, Policy and Influencing Officer, Centre for Sustainable Energy

Corrections and clarifications