What is a Smart Meter and How Does It Work?

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Last updated: October 31, 2023

You’ve probably heard the term smart meter, or maybe you’ve even had one installed in your home. They’re the talk of the town these days and seem to be the latest gadget on the technological block. The UK government have massive plans for the nationwide roll-out of these devices, and to date, millions have been installed. Maybe you’ve even wondered if you should get one, sitting with the question, “are smart meters good?” and “will a smart meter save me money?”

Well, before we get into the nitty-gritty of why they’ve become so popular, it is essential to understand how they work. So, what exactly is a smart meter, and is it worth all the fuss? Here we explore these intelligent systems in greater detail.

What is a Smart Meter, and How Does It Work?

Smart meters are intelligent electronic devices that clearly and accurately measure electric and gas consumption. Essentially, they comprise of three systems – A smart meter that reads electricity, a smart meter that reads gas, and an in-home display unit (IHD) that clearly shows consumers how much gas and electricity is being used. Ultimately, these intelligent machines make reading your energy consumption a much easier feat, and they send this information directly to energy suppliers on your behalf. Long gone are the days of having to rattle around a dark loft or brave the cold weather to take a manual reading. With an intelligent system, real-time data is always available with the click of a button.

3 Smart Systems: Electricity Meters, Gas Meters, and the In-Home Display Unit

Electricity smart meters connect to the mains in your home (basically the central hub or electrical grid) and connect to a larger, nationwide grid (much like a mobile phone connects to a larger network). The reader can track and monitor electricity consumption 24/7 and then sends these readings to your electricity supplier.

Gas meters work in a slightly different way. Mostly, they’re in ‘sleep’ mode, but every 30 minutes or so, they kick in, wake up, and send data to the electricity grid. These units are usually battery-operated.

Both units link to your IHD unit. This digital screen highlights your electricity use and the associated cost, which helps consumers to understand the cost of energy consumption. Amazingly, you could pop the kettle on and track how much your cuppa cost you in an instant! This quick, fast-paced digital data is a great way to understand how consumption correlates to spending.

Benefits of Smart Meters : Why They’re So Popular

Smart meters are beneficial to both consumers and energy suppliers. Here we explore some of their advantages.

For consumers, they offer:

  • Accurate readings: The key benefit of these units is that they offer consumers and energy suppliers clear and precise readings. Since the data can be viewed in real-time via the IHD, they also empower consumers to track their energy consumption.
  • No more estimates: With smart meters becoming the norm, long gone are the days of having to stress about energy bill estimates. Consumers shouldn’t have to pay for the electricity or gas that they aren’t using, and opting for intelligent technology means that your bill will be accurate every single time. This precision can ultimately save you money and offer peace of mind that you won’t be overcharged for the energy you haven’t used. This is particularly beneficial if you’re going away on holiday and know you won’t be using much power for a few weeks.
  • Energy-saving and potential money-saving: Knowledge is ultimately power, and when you’re confronted with the numbers, it is much easier to see where you can save. Having a smart meter will quickly show you what appliances are using too much energy. For example, you might notice that your geyser swallows a great deal of power and might opt to turn it off during certain times of the day. These systems can help people better their energy consumption habits and ultimately cut down on costs.With climate change and global warming on the rise, there is a great benefit to all consumers being aware of how they use energy and working together to reduce their carbon footprint.
  • Flexibility: When you use smart technological systems, the options are endless. These machines might offer consumers easier ways to top up their meters (much like a mobile phone), and this could allow for greater ease and convenience. 

Added to this, energy-smart meters also have several benefits to energy suppliers, these include:

  • Accurate, real-time reading of gas and electricity use. This keeps consumers happy and energy suppliers clear on what they are owed.
  • No more having to read meters manually and bill customers based on estimates. This can save companies in terms of human power and prevent human error with regards to manual meter readings.
  • Precise data and insights that can support business operations going forward and help third parties better understand what consumers need.
  • Enabling a nationwide smart grid to streamline the supply of gas and electricity and work towards a greener, more sustainable future.

Smart Meter Showing Carbon Emissions

Why are Smart Meters Being Introduced?

The British Government plan for all homes to work on smart meter technology, and this is for a few reasons. Firstly, these meters can go a long way in supporting sustainability and cleaner energy use. Ultimately, this can ensure more sustainable energy use going forward and reduce the country’s carbon footprint.

They also pave the way for a greener future for all since they educate people about their personal energy consumption and often inspire people to cut down on how much energy they are using. Since we can track usage in real-time and see the associated cost, it can encourage better energy use from consumers.

Moreover, these systems link to an intelligent grid. Having a nationwide smart grid allows energy suppliers and governments to monitor precisely how much energy is being used, and this data can offer important insights about sustainable energy going forward.

Smart Meter Compatibility

Smart meter devices are compatible with all energy suppliers. So, if you decide to change supplier after the device has been installed, it should theoretically work. Since these systems are relatively new in terms of the large-scale roll-out, there have been a few teething issues. Some systems have stopped working when people change suppliers. However, this can be easily fixed, and with new insights and experience, troubleshooting will prevent these issues in the future.

Smart Meter Installation: How It Works

The UK government have urged all energy suppliers to upgrade meters in all homes across the country. Either your supplier will contact you directly, or you can reach out to them and inquire about the process. While it is not mandatory, it could cost you more in the long run to not have one, and you might miss out on special deals and access cheaper tariffs. However, if your old meter has to be replaced, suppliers will usually replace it with a smart meter as these will eventually become the norm.

You won’t be charged for the installation of the smart meter and the accompanying in-home display unit. However, part of your monthly billing will go towards the maintenance and running of these devices, much like it already does. Therefore, there is no upfront payment, and billing will continue to work as it has before.

While suppliers can access your data and use it for marketing means, you are allowed to object to this. However, if you do grant them permission to share it, third party companies might reach out to you with specific products based on your data use.

Are Smart Meters Safe?

Much has been discussed with regards to smart meters and health and safety. Understandably, consumers have the right to consider this when it comes to installation. While these units do give off radio waves, current data shows that they do not pose a significant risk to health. Studies were carried out by an organisation called Public Health England to explore exposure to these radio waves, bodily exposure, and assessment. The study highlighted that the exposure from these meters was much less than other electronic devices such as WI-FI devices and mobile phones.


Smart meters are an innovative way to encourage better energy use and create a greener future. They offer consumers real-time data and empower people to understand their gas and electric consumption. With this information at hand, consumers can change their habits and save money. It could be as small as turning off the geyser when going to work or cooking with gas rather than in the oven when you’re making a meal for one. Every little help when it comes to saving energy!

Added to this, these devices offer consumers peace of mind by ensuring that clients are accurately billed. If you are interested in exploring this option and haven’t yet had a smart meter system installed, it might be worth chatting with your energy supplier.

What’s your experience with smart meter systems? Have they worked for you? Let us know!