Do Smart Meters Save Money?
Friday 29th April 2022
What's it all about?
This article's designed to help you:
- Understand the basic of smart meters.
- Learn how to use your smart meter to save cash.
- Budget your household energy use effectively.
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Friday 29th April 2022
What's it all about?
This article's designed to help you:
We’re all having to take a closer look at our energy consumption these days, whether we’re working to bring down our household CO2 footprints or just battling rising costs. One of the key tools in this effort, we’re often told, is the humble smart meter – but what are these devices actually good for?
Realistically, all a smart meter does is send information about your energy use directly to your supplier. They’re convenient and accurate, and work well to take the guesswork out of your billing. Really though, most of the benefit you get from having one fitted isn’t actually about the meter at all. It’s the monitor you probably tucked away in a kitchen cupboard that stands to do you the most good.
So, whatever you’ve heard about smart meters “magically” saving you cash just by being there, that’s really not how they work. Instead, you can use that little monitor to build better energy habits around your home – potentially cutting your bills by as much as £10-£20 a month. At the same time, if you’re concerned about your greenhouse gas emissions, you can keep an eye on those as well. As long as we’re saving cash, we might as well save the world at the same time!
So, no – a smart meter won’t bring your energy bills down on its own. What they’re great for, though, is giving you the information you need to manage the energy you’re actually using. You’ll see in more-or-less real time, for example, the actual financial impact of boiling a kettle or running a bath. We’ve talked before about how the most effective way to save on costs like electricity and heating bills is to make small, consistent changes that stack up their benefits over time. Ridiculously simple day-to-day changes like switching devices off instead of leaving them on standby can make a real difference to your bills if you stick with them. Everything from turning off unneeded lights to nudging down thermostats can help, and your smart monitor will give you real-world feedback on the savings you’re making.
Your smart monitor can also help you budget for your energy use, by setting targets for how much you’re prepared to spend per day. Again, it’s all about making small, meaningful changes that you can stick to. The better the information you’re working with, the more effective your saving will be.
If there’s one way that a smart meter can help to bring your costs down on its own, though, it’s by keeping your supplier up-to-date on your actual energy consumption. If you’re used to your bills being based on estimates and averages, then you could stand to save quite a lot of money by switching to a smart meter if your supplier supports them. Keep in mind that not all energy firms are set up to accept automatic readings, so there’s a chance you might still have to send them in yourself. If it saves you money, though, that little inconvenience might be a small price to pay.
Checking your daily energy use with your smart monitor is a good habit to build. It’ll help you set targets for cutting costs and make your household budgeting a lot easier. According to a 2019 report from Smart Energy GB, 85% of homes that switched to smart meters ended up saving on energy. There’s real power in getting that at-a-glance information, but you really do have to get comfortable using it to make decisions and changes.
It’s difficult to recommend swapping energy suppliers in a crisis, even though it’s generally sound advice to look around for the best deal. With the cost of energy soaring, though, even auto-switching service Look After My Bills is telling its customers to sit tight until things are less unpredictable.
Even so, having a smart meter can still put you in a better position whether or not you’re able to switch supplier. A lot of energy firms have tariffs and deals you can only qualify for with a smart meter fitted, so you’re opening up your options for a better offer down the road. Also, the extra information you get from your smart monitor will help make picking out those better deals a lot easier in the first place.
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For most people, getting a smart meter fitted is just a matter of asking their energy supplier to put one in. They’ll install it, set it up, check it’s working and explain how to use it. If you really want to get the best out of the monitor that comes with it, though, you should definitely hang onto the instructions. Any features it has, like setting up target budgets for your energy use, will only help you save money if you get to grips with them.
Depending on how you pay for your energy, your smart meter could be set up in either of 2 ways. Credit mode is your standard set-up, where you pay for the energy you’ve already used, generally by regular direct debit, with the terms set by your supplier. The good thing about this is that you won’t suddenly find yourself cut off, unless you’ve built up a major debt over time. You’ll also often find slightly better deals with this system. Basically, it’s more common than prepayment deals so you’ll tend to have more options in terms of tariffs and suppliers.
With prepayment meters, as you’ll have guessed from the name, you’ll be paying up-front for your energy, then burning through your available credit until it’s used up. If you still need more, you have the option to top up your prepayment for a short-term boost. You can pay with your usual bank card, with vouchers or through a payment key that you “load up” with cash in advance. You can buy credit at places like local shops or post offices, or from your supplier’s website. In a lot of ways, it’s like a pay-as-you-go mobile phone contract.
This system can be good if you’re budgeting your energy use, since it’s harder to overspend than with a standard credit meter. Simply put, you can’t use more energy than you’ve already paid for. The less-great side to it is that it tends to be more expensive, with fewer tariffs and suppliers to choose from. Even worse, you’re looking at a fairly swift cut-off of your energy supply if your credit runs out. Remember – even when you’re not using any energy at all, you’ll still be racking up daily standing charges for having your supply connected at all.
Keep checking back here for more money tips and updates. We’re experts at saving you cash and we’re always here to help. That’s the reason why you’re better off with RIFT.
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