Revised smart meter policies: potential financially compensating circumstances for consumers due to subpar service and installation by providers
In an effort to improve service quality and protect consumers, Ofgem has proposed new rules for energy suppliers regarding smart meter installation and faulty smart meters. These rules are part of a review of Ofgem's Guaranteed Standards of Performance (GSoP) and aim to boost smart meter standards across Britain.
A smart meter is an essential tool for accurate billing, cheaper tariffs, automatic meter readings, and real-time data, according to Charlotte Friel, director of retail pricing and systems at Ofgem. These devices can also help reduce energy bills by making energy usage tracking easier.
The four new rules proposed by Ofgem are:
- Automatic compensation if a customer waits more than 6 weeks for a smart meter installation appointment.
- Automatic compensation for a failed smart meter installation due to a fault within the supplier’s control.
- Requirement for suppliers to provide a resolution plan within five working days when a customer reports a problem with their smart meter.
- Automatic compensation if a smart meter is not operating in smart mode and is not fixed within 90 days.
Compensation for affected customers will be automatic under these rules. For example, customers whose smart meters do not send readings to their supplier and this is not fixed within 90 days will receive a £40 payment. The new framework also extends compensation rights, applying to more customers including microbusinesses.
These rules are planned to come into effect from early 2026 following statutory consultation. Key stakeholders will be offered the opportunity to give feedback on the proposed rules. If the rules pass the consultation, Ofgem aims to have the new smart meter standards in place from early 2026.
Ofgem's compliance team has reconnected over 600,000 faulty smart meters since last July, but around 3.9 million households in the UK still have a faulty smart meter. Consumers are not required to apply for compensation, but should inform their energy supplier about problems with their smart meter.
The government aims for 74.5% of homes to have a smart meter by the end of 2025. According to the latest data, 67% of homes (39 million) had a smart meter by the end of March 2025. The existing GSoP system will be used to pay any compensation owed for smart meter issues.
The new rules are intended to ensure that energy suppliers provide a high standard of service for smart meter installation and maintenance, and to protect consumers from poor service. By automating compensation for certain issues, Ofgem hopes to make the process fairer and more efficient for all parties involved.
In line with the ambitious government goals, customers can expect improved personal finance through reduced energy bills with the implementation of newer smart meter standards beginning from early 2026. To keep consumers informed about these changes, Ofgem encourages everyone to subscribe to its newsletter for regular updates on personal finance matters related to energy usage.
