Smart meters for businesses

Under the Government’s smart meter rollout, All SMEs must be offered the chance to get a smart meter installed by 2025. But how do smart meters work, and can they help your business save energy and money?

Written by

Liam Walker

Utilities comparison expert

Last Updated

26 JANUARY 2022

6 min read

Smart meters for businesses

As part of a government-led initiative to cut energy bills and carbon emissions, smart meters are being offered to domestic households and small businesses across England, Wales and Scotland . By 2025 , all domestic and business customers must be offered the chance to get a smart meter installed by their energy supplier.

By moving from traditional meters to a smart meter, you’ll no longer need to take meter readings. This means you can say goodbye to estimated bills and receive up-to-date accurate bills based on your actual energy usage.

With the rising cost of energy, it’s vital that small businesses have the chance to monitor their energy consumption and cut their overheads. A smart meter helps you take control of your energy usage – which in turn can help cut your business energy bills and your carbon footprint.

Here’s what you need to know about smart meters, and how having one could benefit your business.

What is a smart meter?

Just like standard meters, a smart meter reads how much energy you’re using. The difference is, a smart meter takes an automatic reading and sends the data directly to your energy supplier via a secure wireless network.

As a smart meter submits your real-time energy usage, your energy supplier will be able to bill you accurately, and you’ll no longer receive estimated bills.

Does my business already have a smart meter?

If you’ve been told by your energy supplier that you don’t have to send them meter readings as they receive them automatically, then you have a smart meter.

The type of smart meter you have, depends on when it was installed:

SMETS1: installed prior to 2018 – communicates with your supplier via a 3G mobile network.
SMETS2: installed from 2018 onwards – communicates with your supplier via a central communications hub called DCC (Data and Communications Company) using a secure wireless network.

If you’re not sure which type of smart meter you have, ask your energy supplier.

The benefits of having a smart meter for your business

There are a number of ways that your business could benefit from having a smart meter:

Help cut your energy usage
While a smart meter can’t actually cut your energy usage, it can provide you with the data you need to monitor your business’s energy consumption, so you can take steps to reduce it.

Accurate bills can improve your cashflow
Estimated bills don’t reflect your real-time usage, so you might end up overpaying or underpaying your energy supplier. This could cause problems for your cashflow management as you’re never quite sure how much to budget for. With a smart meter, you’ll get accurate bills and will only pay for the energy you use.

Problems can be resolved more quickly
By relaying constant and accurate information to your energy supplier, any problems with your service, like a power cut can be diagnosed and resolved much more quickly – which means less downtime for your business.

Could help reduce your carbon footprint
Being able to monitor the energy you use and take steps to control your energy consumption can help you to reduce your business’ carbon footprint, which is good for the environment. Under the Smart Meter Installation Code of Practice, energy suppliers must also offer energy-efficient advice to microbusinesses w hen installing a smart meter.

Potential access to cheaper tariffs
The national DCC smart grid can relay more accurate information to energy suppliers, creating a more efficient and accurate supply and demand in the energy market. Over time, this could help lower the cost of energy.

In a more competitive market, suppliers could offer innovative new tariffs to small business customers – for example, time-of-use tariffs, where energy is cheaper during specific times of the day.

Easier to switch energy supplier
The new generation SMETS2 smart meters are connected to a single national communications network. This means that switching business energy suppliers will be easier. There should be no interruption to your service, as the new meters will be compatible between suppliers.

The downsides of a smart meter for your business

While the rollout is still going on, there could be some potential short-term issues:

Switching suppliers
Switching suppliers might be more difficult if you have a first generation SMETS1, as these aren’t yet connected to the DCC network. You may lose the smart functionality of your meter when you switch, and you’ll have to take manual readings again. However, first-generation meters are gradually being moved onto the national network, so customers will eventually get back the full smart services after they switch.

Poor signal
If your business premises are in an area with a weak network signal, the smart functionality of your meter might not work. This would mean going back to manual readings and estimated bills.

Find out more about the pros and cons of smart meters.

How to get a smart meter installed for your business

If your energy supplier hasn’t contacted you yet about installing a smart meter, give them a call and request one. They’ll arrange for an engineer to visit your business premises and install your meter. All new smart meters will now be the latest-generation SMETS2 meters. Installation typically takes around an hour.

How much does it cost to upgrade to a business smart meter?

The initial installation is free of charge. However, the overall cost of the smart meter rollout will be passed on to customers via their energy bills . That said, the savings you could potentially make should outweigh any small initial increase.

Frequently asked questions

Do I need to switch energy suppliers to get a smart meter?

No, your current supplier should offer you a smart meter. However, if you want to sign up with a new supplier and you’re in the switching window you might want to wait until you’ve switched before getting a new smart meter installed.

How much could my business save by getting a smart meter?

It depends on how carefully you monitor your energy usage. The smart meter itself can’t save you money. But it can help you to reduce your business’s energy consumption. The government estimates that smart meters could save customers up to £250 on their energy bills, while reducing national carbon emissions by 45 million tonnes – the equivalent of taking 26 million cars off the road for a year.

Are there alternatives to smart meters for my business?

If you are a larger, energy-intensive business, you can opt for an Automatic Meter Reading (AMR) electricity meter instead of an SMETS2 smart meter. It works in a similar way to a smart meter, by collecting data and transmitting readings to your supplier every half hour. But instead of being part of the DCC national grid, AMRs send data directly to the supplier via a remote communication channel.

If your business uses more than 100,000 kWh of electricity or more than 293,000 kWh of gas per year, you might already have an older-style Advanced AMR installed, as half-hourly meters are compulsory for larger companies.

AMRs are also offered as an alternative to smaller companies that can’t get a smart meter installed yet, because of a weak signal or installation difficulties.

Should I get a smart meter now, or wait for the rollout?

Due to the impact of the COVID-19 pandemic, the smart meter rollout deadline has been delayed until 2025 . But now that restrictions have been eased, installations have resumed . If you want to benefit from a smart meter, and take control of your energy consumption, the sooner you request one, the better.

Is a smart meter for my business compulsory?

Smart meters are not compulsory; you don’t have to accept the offer if you don’t want one. However, if your meter needs replacing, or you’re installing one for the first time, your supplier is required to install a new-generation smart meter.

Considering the potential economic and environmental benefits for your company, it makes sense to go smart and replace your traditional meter.