What is a smart meter and how it all works to help you save money?

09 December 2021 | Matt Mostyn

Now more than ever, we’re all looking for ways to reduce the amount of energy we waste. The most effective way to track and cut down your energy use – and lower your bill – is by using a smart meter.

But what is a smart meter? And how exactly can you benefit from using one? 

This guide will tell you everything you need to know.

How do smart meters work?

Are smart meters more accurate?

Do smart meters need WiFi?

How can smart meters help save money?

Smart meter costs?

Other benefits of smart meters

Should I get a smart meter?

What does a smart meter look like?

Smart meters and solar panels

Smart meters and switching suppliers

Smart meter myths

What is a smart meter?

A smart meter is a digital gas or electricity meter that automatically sends your meter readings to your energy supplier. That means you’ll never need to submit a meter reading again.

How do smart meters work?

Smart meters communicate through two wireless networks: the HAN (home area network) and WAN (wide area network). 

All about HAN

The HAN is a secure network that works in much the same way as the wireless systems that link the devices in our homes (for instance, how computers link with printers). 

A smart gas meter uses HAN to send information to its paired electricity meter. Essentially, HAN lets smart meters communicate with any other devices or computers they’ve been linked to, so long as they’re within range.

All about WAN

The WAN (wide area network) is like the networks used by mobile phones. In a nutshell, smart meters use WAN to send the data your energy company needs to create those much-favoured fully accurate (as opposed to estimated) bills.

Some suppliers use the WAN to let you see your energy use in your online account. If you share half-hourly data with your supplier, you’ll be able to see exactly what you've used and when. That’s incredibly useful for helping you to understand and be more in control of your energy use at home.

Are smart meters more accurate?

Most definitely! Having a smart meter that automatically sends regular meter readings means your supplier knows exactly how much energy you're using, making your bills more accurate.

Read more about the benefits of smart meters and how to get one for no extra cost. 

Do smart meters need WiFi? 

No they don’t need WiFi to work. The first, IHD3, model wasn’t designed to connect to WiFi, but the later version, IHD6, can be connected, but it doesn’t need to be. Your engineer can pair it for you during installation if you want, or they can show you how to pair it yourself at a later date.

Here are some of the benefits of having a WiFi connection for your IHD6:

  • If the IHD has issues, OVO can understand the problem straight away

  • Real-time customer meter readings can be collected

  • It makes updating software on your IHD easier

How can smart meters help save money?

smart meter benefits

A smart meter helps you to keep an eye on your energy use. It lets you see where you could be wasting energy (and money), so you can use that information to make tweaks in your energy use. That in turn helps you to cut your costs, which should help lead to lower bills. 

The In-Home Display (IHD) is a small mobile screen that  gives you information directly from your smart meter. This means you can see how much energy you use whenever you switch on a hairdryer or boil the kettle for a cuppa.

Smart meter costs

There’s no charge for getting a smart meter installed. Another great reason to get one! 

That’s because the cost of the nationwide smart meter rollout is covered within every supplier’s energy bills. Just like part of your bills goes towards the upkeep and replacement of meters and infrastructure, another small part goes towards the cost of smart meter installations. 

What are some of the other benefits of smart meters for our energy supply?

Our nation is moving away from burning fossil fuels, and the demand for electricity is increasing. For example, we’re starting to use eco-friendly electric cars and hybrid vehicles. We’re also gradually shifting over to more low-carbon alternatives to our dirty gas boilers, which means more central heating systems powered by electricity. 

All that increased demand means we’re having to make changes to the way the National Grid works. 

What is the smart grid?

A smart grid uses digital technology to better predict how much electricity we need at any one time. By having data from smart meters:

  • We can do a better job of matching supply with demand
  • The grid can better identify any power cuts or performance issues
  • The grid can be more responsive to power generated by renewables 

We can move towards a future of net zero living

Smart meters are one positive step towards upgrading our energy system so it’s better suited for the future. But smart network benefits depend on a critical mass of SMETS2 meters being installed. The more of us that have a smart meter, the greater the benefits, says both Ofgem (the UK’s energy regulator) and the government.

If you have any other questions around smart meters, read our comprehensive smart meter FAQs page to find all the answers you need.

What are the disadvantages of smart meters? 

There aren’t really any disadvantages of having a smart meter, unless you consider cutting your carbon footprint or your bills a disadvantage – then we wouldn’t recommend it! 

But, as with any new technology, there have been some hiccups in installing them across the nation. We’ll tell you all about these, along with some common “smart meter myths” a bit further down. 

Should I get a smart meter?

We might be a little biased here – being an energy company that cares about the environment – but we can only give smart meters a great big thumbs up! 

From helping you waste less energy to helping you fight the climate crisis, here’s a little reminder of the main reasons for getting yourself a smart meter

Find out more about the differences between smart meters and energy monitors

How to get a smart meter today

If you’re already an OVO member, getting a smart meter installed is very straightforward. Simply book an appointment, and we’ll start the ball rolling. 

Not yet sure of the many reasons why it’s worth joining us? Allow us to convince you!

Book a free smart meter appointment

Are smart meters compulsory in the UK?

The government wants all homes to have smart meters by 2024. Although energy suppliers are obliged to offer smart meters to all their customers, you don't have to accept an installation.

If you have a query, whether it’s about the technology or the installation process, check out our helpful energy guides. Simply type in what you want to find out in the search bar, and all the content we have on that subject will pop up. 

And if you haven’t checked out the OVO Forum yet, it’s a great place to find answers on thousands of topics, including smart meters

What does a smart meter look like?

ihd screen smart meter

There are several different kinds of smart meter, and they all look a little bit different. One of the most common smart meters to be installed in the UK is the Landis+Gyr (L+G). You can see some images of them in our guide. And there are images of Aclara and Flonidan S2 smart meters on the OVO Forum. There are makes and models, but they are very similar.

Usually, you shouldn’t need to have much interaction with your smart meter. But you may have more contact with your In-Home Display (IHD), which looks like the one in the image above. You’ll be offered an IHD when your smart meter is installed. It’s optional, but it can be really handy to see your energy use. 

You’ll need to make sure you have enough space near your existing meters for a smart meter to fit. Here are the dimensions, to help you check:

  • Electricity SMETS2 smart meter: W 127mm H 160mm D 65mm
  • Gas SMETS2 smart meter: W 235mm H 262mm D 167mm

Smart meters and solar panels

In our ever-evolving modern world, with new technology becoming increasingly available, it’s sometimes hard to keep track. Smart meters and solar panels are both great ways you can save money and cut carbon emissions. But do they work together?

You can have both a smart meter and solar panels installed. But not all energy suppliers have their current smart meters set up to read the panels’ exported energy. 

Smart meters and switching suppliers

There have been some complaints about smart meters losing their smart features, or “turning dumb” if a customer switched supplier. But that all depends on what kind of smart meter you have. 

What happens with my smart meter if I change supplier?

Smart meters were first introduced into people’s homes in 2013. This first generation, or SMETS1 smart meter, was fitted with the same kind of 3G sim card that you could find in a mobile phone. That way, they could update the supplier at set intervals. 

The only problem was, if you changed supplier, many of this type of meter lost their smart features, and stopped sending automatic readings.

The next generation, SMETS2, were designed in such a way that meant suppliers could be switched, without loss of any smart features. Suppliers started installing this type of smart meter in 2018. 

For help with switching suppliers with your smart meter, check out our handy guide.

Smart meter myths

Let’s look at some of the mysterious (and misguided) myths about smart meters.

Smart meters are installed completely free – unless there’s any complicated building or engineering work involved because of the way the meter is positioned in your home.  

If there’s a need to move your existing meter(s), sadly this isn’t covered by your smart meter installation, and it’ll need to be arranged separately. Speak to your local Distribution Network Operator (DNO) or the National Grid.

This would only happen in very unusual circumstances. On average, it takes just  60 minutes for one smart meter set-up. If you need both gas and electricity smart meters setting up, it takes around 90 minutes. Your power will have to be turned off during that time, but it shouldn’t cause too much disruption to your day. 

With OVO, our bookable slots are for 4 hours. You’ll need to be home for the whole time. But, for example, if you booked an 8 to 12 slot, and the engineer arrived at 11.30, they may not finish until 1pm. So do bear that in mind. 

In the 2021 Uswitch Energy Awards, we were runners-up for the Best Smart Meter Installation, and our members have something to say about it too. 

"OVO smart meter experience was fantastic. The engineer wore PPE and was very friendly and professional." – Tracy

"The appointment was very easy to book, communication was great, the engineer called to confirm, turned up on time. He was polite, courteous and professional. Great job!"  – Charles

For more info on smart meter installation, read our guide. 

Some people worry that smart meters (like mobile phones, WiFi, and satellite TV) emit low-frequency radio waves that could be harmful to people who are sensitive to electromagnetic fields. Yet this is one myth that’s been resoundingly dismissed.

Public Health England has been researching this for over 10 years and has found there’s no evidence of any health risks. They’ve introduced strict product standards to make sure smart meters are safe, and they’ll continue to check for any ill effects as more and more homes get their new meters.

Smart meters have been rigorously tested for safety. They’ve passed all the UK and EU regulations that make sure a product is safe.

Smart meters are super secure. We use safety measures agreed with the government (like encryption) to make sure that any data your smart meter shares with us is always safe and private. 

We also follow strict rules set out by the industry regulator, Ofgem, and all your personal data is safeguarded by the Data Protection Act too.

Smart meters don't use the internet and have their own closed communications system. It's been designed with top cyber security experts, including the government's security and intelligence organisation, GCHQ.

Read more about smart meter safety and security here

The very first smart meters were occasionally accused of making a high-pitched whine or ticking sound. Nowadays they use the same kind of technology as mobile phones and tablets, so they don’t make any noise at all. All of which is great news for you, your neighbours... and inquisitive pets! 

If you have any problems  once your smart meter is up and running, check out our comprehensive smart meter trouble-shooting article. It’ll help you solve the most common smart meter issues in no time.

You shouldn’t need to switch to a different plan when you get a smart meter. Though if your current meter is set up with unusual on and off-peak times, those settings might change as part of the smart meter upgrade.

If you’re currently on a prepayment or Pay As You Go plan, your smart meter will be set up as a prepayment meter. If you pay for your energy monthly,your plan and payment method won’t change.

As explained in our section above on smart meters and switching suppliers, the first generation, or SMETS1 meters could lose smart features when switching. For more info, see our guide on switching suppliers with a smart meter.

This is one we can’t deny! It’s true a smart meter can help you reduce your carbon emissions and fight climate change. And in cutting down your use, you’re saving money. But a smart meter can’t do it alone. You’ll need to use the information it offers you to make the energy-saving changes yourself

For example, a  smart meter can tell you your lighting bill is high, but it can’t turn off the  lights when you leave a room And a smart meter can tell you that every wash you do at 65C costs you 12p (for example), but it can’t set your washing machine to 30C, or eco-mode.

By using your In-Home Display or online account, you can see this kind of information, then make those little tweaks yourself. 

For 120 more energy-saving ideas, check out our blog. 

It has been said that some people can get anxious as they realise how much things cost, and turn off the lights and heating to save money. Understanding the idea of kilowatt hours (kWh) may be confusing to some people too. 

But, although we can’t speak for everyone, we think that knowledge is power. So having access to information that can save you money, is more beneficial than not having the information at all. 

Getting a smart meter installed won’t directly increase your bills. There are no hidden charges or effects on your use. But there are a couple of things that will change after getting a smart meter that could make your bill seem higher. 

  • Your smart meter is accurate. Unlike some old meters that sped up or slowed down occasionally and didn’t measure your energy use accurately. 
  • Your bills are no longer estimated. Having a smart meter means you’re charged for exactly the amount of energy you use, because your readings are sent to your supplier regularly. This could mean that your monthly bill is higher, but it’s only because your previous bills were under-estimated. If you stuck with a traditional meter, you’d still end up paying for the same amount of energy overall, but you might be delaying the cost until you get a nasty surprise bill.

Why not check out the OVO Forum for more information on smart meter billing. 

OVO smart meters: an award-winning experience

With an OVO smart meter, you’re getting the latest technology to help you fight the climate crisis. But you’ll also get the best installation experience, as voted in the 2020 Uswitch Energy Awards

Ready to get your smart meter?

If you're not yet with OVO Energy, check out our home energy plans. They all come with 100% renewable electricity if you have a smart meter1 and every year we plant 1 million trees in the UK2

Already an OVO member and ready to jump in? Book an appointment to get your smart meter fitted.

Finally, find out everything you need to know about the Landis+Gyr (L+G) smart meter. It's one of the UK’s most popular – and some might say confusing to identify – smart meters!

Sources and references:

1 From 1 October 2022, 100% renewable electricity is only available to customers who currently have an electricity smart meter or who have a smart meter installed. Learn all about the benefits of a smart meter or if you’re ready, why not book a smart meter appointment today? Not all customers may be able to have a smart meter installed. Terms and eligibility criteria apply. If you have a fixed contract you will continue to receive 100% renewable electricity until the end of your contract. 100% of the renewable electricity we sell is backed by renewable certificates (Renewable Energy Guarantee of Origin certificates, also known as REGOs). See the latest information on our REGOs webpage. A proportion of the electricity we sell is also purchased directly from renewable power generators in the UK.

2 OVO Energy plants 1 million trees across the UK each year with its tree planting partners, The Conservation Volunteers and the Woodland Trust. Trees absorb carbon dioxide from the atmosphere, so planting trees helps to slow down climate change.