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Do smart meters reduce households’ energy consumption?

  • Blog
  • 13th Jun 2023

Smart gas and electricity meters are devices that measure and record the amount of energy that a household uses (every 30-minutes) and inform the consumer of how much they are spending on energy via an In-Home-Display (IHD). Consumption data is also automatically relayed to the household’s energy supplier.

Smart meters are replacing traditional gas and electricity meters across the UK, making the energy system more efficient and flexible, helping the UK use more renewable energy, and delivering net zero in the UK. There are 32.4 million smart and advanced meters in Great Britain as of 30 March 2023, representing 57% of all meters.

Smart meters are also helping households control their energy use and – on average – reduce their bills, and the Government wants as many people to benefit from them as possible. Prior to our work here, the latest estimates about the impact of installing a smart meter in a home (based on the best available evidence) were a 3.0% saving for electricity and 2.2% for gas (0.5% for gas on prepay meters). This reduction is achieved through changes in household behaviour, driven by:

  1. Direct energy feedback via In-Home-Displays (IHDs), which show consumers their near-real time energy consumption in pounds and pence, helping them learn how their actions around the home associate with energy use, and support people to manage their expenditure day to day and month to month.
  2. More accurate billing, again helping to ‘close the reward loop’ between consumers’ actions, and the incentive they see through their bills
  3. Engagement and advice provided before, during and after the installation, from the energy companies, the installer, and through Smart Energy GB’s communication campaigns

So, do they really achieve these reductions?

What we did

In January 2022, The Department for Energy Security & Net Zero (previously the Department for Business, Energy and Industrial Strategy, BEIS) commissioned BIT to complete a comprehensive evidence review, gathering the latest analyses from the ten largest domestic energy suppliers to understand what conclusions could be drawn from their own evaluations of the energy consumption impacts of smart meters. We’d previously worked with BEIS to develop guidelines for said suppliers to undertake rigorous quasi-experimental evaluations – which some had chosen to follow, while others had taken their own approach to the research.

With the suppliers’ research so varied in approach, we first developed a review framework to assess the internal validity, external validity, and precision of these studies. Using this framework, we:

  1. Undertook an initial review of all evidence to decide which were robust enough to take to the next stage
  2. Had a series of methodological review meetings with the authors of the selected studies to ensure we had an accurate understanding of what was done
  3. Completed a formal review of each study
  4. Based on these reviews, identified the studies to include in a formal meta analysis

What we found

A total of seven studies from four suppliers were deemed to be rigorous enough to include in our evidence synthesis. Four studies from Supplier A, and one study each from Supplier B, C, and D. We undertook a formal meta-analysis to identify an average energy saving estimate. Summarised below. Each study’s square is sized in proportion to its weighting in the pooled estimate, and the orange whiskers around each study (and the pooled estimate) represent the 95% confidence intervals.

Figure 1: Forest plot for the impact of smart meters on electricity consumption

Figure 2: Forest plot for the impact of smart meters on gas consumption

We find that smart meters save an average of 3.4% of electricity consumption and 3.0% for gas, both with narrow confidence intervals. Both estimates are statistically significant, p<0.001. 

This work provides the most up to date and rigorous evidence yet that households really are saving energy as a result of the smart meter rollout, thanks to the behavioural response they enable. There are many benefits to smart meters, and indeed they’re a vital national infrastructure upgrade to enable a more flexible grid as we transition to more renewables and more electricity demand overall. But the immediate energy-saving benefits were always a key part of their justification – and this evidence provides positive evidence that they’re delivering on this promise.

The full report is available here

Take a look at our services to see how we tackle these projects, from Understanding Behaviour to Creating and Implementing Solutions.