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How Smart Meters Work - A Simple Guide

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By Adam Ifans
2 Jun 2025

Having a smart meter installed will help you monitor your energy use, but how does it work, and why is it good for the environment? We’re here to help answer this.

The government has big plans for smart meters. The idea is that they help consumers save money by understanding their energy use, while at the same time underpinning the move to a greener, more reliable energy network.

There are over 38 million smart meters installed in homes and businesses around Britain. That’s two-thirds of all the gas and electricity meters in the country.

Despite these impressive figures, as with any new technology, there can be a bit of confusion around the subject. We’re here to explain exactly what smart meters do, how they work and the benefits of having one.

What is a smart meter?

There’s nothing particularly complicated about smart meters. At heart, they’re simply the newest type of energy meter for gas and electricity, which we’re rolling out to customers for free.

Smart meters were named around the same time as all the other smart devices we use. Think of smartphones, smart televisions, smart speakers and so on. Just like these devices, smart meters are fundamentally the same but with a few improvements added to the experience.

If you have a smart meter, you also have an in-home display (IHD) which shows your energy usage and cost in near-real time. In this way, you can pinpoint where and when you might be using more energy than you expect, allowing you to be more energy efficient.

A free smart meter from Ecotricity can:

  • More accurately measure how much gas or electricity you’re using, compared to ageing mechanical meters

  • Automatically send us your meter readings, so you don’t need to deal with estimated bills or remembering to take readings or letting in people to take independent readings

  • Show you exactly how much energy you’re using throughout the day, on a special display that links wirelessly to the meter

  • Enable you to top up a Pay As You Go (PAYG) account in your online account or by using our phone app.

smart ihd
How do they work?

Just like mechanical meters, electricity smart meters measure the electrical current flow and voltage coming into your home. Gas smart meters measure the volume of incoming gas in the same way.

It then sends your meter readings to your energy supplier across a secure, encrypted wireless network. It also sends the information to your in-home display, so you can see how much energy you’re using and what it’s costing you at any point in the day.

In the case of a gas meter, the communications system is powered by a battery to avoid mains electricity being too close to a gas supply. The gas meter sends its information to your electricity meter, which then connects to your supplier. Smart meters can also send information about power outages, to help network operators fix problems in your area more quickly.

Is it worth having a smart meter?

Swapping your old meter for a free smart meter makes life a lot easier. No more meter readings to worry about and the power to check up on your energy use whenever you like, instead of waiting for a bill.

Smart meters are also playing an essential part in greening up our energy grid. They can keep help track of the areas in the country where energy is being used, helping to balance supply and demand and wasting less energy. There’s even a huge saving in carbon emissions from the meter agents driving from house to house to take readings every few months.

Smart meters also allow canny customers to take advantage of special energy tariffs, like the Ecotricity 1 Year Fixed EV which gives our customers five hours of cheaper green electricity every night to charge their electric vehicle. Dynamic Time of Use tariffs are also coming soon, where you can benefit from cheap green energy whenever the renewable supply is surging upwards.

Find out more and book your smart meter appointment today!

smart ev

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