How much will a smart meter really save you?

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Smart meters are the latest version of gas and electricity meters and these digital devices are designed to automatically read your meter, resulting in more accurate energy bills. But are they as good as they sound? By 2020, every home will be offered a smart meter by their energy supplier, so we look at whether a smart meter will cost or save you money.

Will a smart meter save you money?

With a smart meter, you are only charged for the electricity and gas you use. This means no more over-priced bills based on estimates. With constant measurement, you can save yourself the cost and hassle of an unexpected excessive payment. Although energy companies refund differences, smart meters reduce nasty surprises.

The main way that smart meters can help you save money is by allowing you to monitor your usage. Being able to easily see how much energy you are using can help you consciously reduce it. This is great for the environment, as well as your bank balance.

Although the smart meter offers you an opportunity to save, you still need to be willing to alter your usage to see the benefits. Even on a standard meter, turning off unused electronics, switching off lights or putting on warmer clothes instead of central heating could still help you save money. The advantage of a smart meter is that you don’t have to wait for your bill to adjust. The smart meter’s running total can also make motivation easier.

While you can control how much you use, the estimated savings are modest. According to Money Supermarket and the Department for Business, Energy and Industrial Action every household will be annually saving £26 by 2020, £33 by 2024 and £43 by 2030.

Any saving no matter how small is surely a good thing though. Or at least it would be if you didn’t have to pay for your smart meter…

How much will a smart meter cost me?

You are never technically charged for a smart meter – all changeovers come with free installation and no upfront costs. Sounds great, right? But there is a catch.

The smart meters cost up to £200 each and this will be absorbed by households – not energy companies. Suppliers are currently adding approximately £6 a year extra to energy bills to cover the price. This reduces the amount you can save with a smart meter.

However, the good thing about this method is that there’s no prohibitive one-off cost. You do not need to outlay a large amount of money to make a small annual saving. This gives everyone equal access to a new meter.

When will I receive a smart meter? Do I have to have a smart meter?

By 2020, the Government aims for every home in the UK to be offered a smart meter. However, some experts say this target is overambitious and there may be a delay. If you want one sooner, contact your supplier to see if it’s possible.

If you decline a smart meter, there are no financial advantages as everyone still pays the rollout cost. However, if you do say no, current advice is that getting a smart meter later will remain free so there’s no rush if you’re unsure. Although once most people transition, there are warnings that certain (and potentially cheaper) tariffs may not be available to those who do not switch.

What is the future of smart meters beyond 2020?

One vision for the future is that we will live in ‘smart cities’. This involves the Internet of Things (IoT) becoming part of everyday life. The IoT is all about ‘things’ connected to the internet, from self-driving cars to devices that help you locate misplaced keys. Today, we can already see how the IoT connects with energy. For example, there are apps that allow you to adjust your heating or turn off electrical appliances when not at home. Smart meters naturally compliment this. As devices continue to interact more intelligently with each other, we will hopefully have more ways to save both energy and money!

Although a greener future could mean a cheaper one, there are concerns that energy suppliers will eventually profit from smart meters. This is because smart meters give these companies more data than ever before (although you can edit your permission levels). This data could then be used to adjust charges, such as charging more for peak times.

Although smart meters are not a money saving guarantee, they are the future. The best way to save money on your energy bill is to simply use less. You can easily offset your £6 annual charge by just switching off unused electrical goods. If you have a smart meter, use it to monitor your usage but don’t expect it to reduce your bill without making an effort.