How Smart Meters work

A Smart Meter works by measuring the electrical current flow and voltage at regular intervals and then using this up to calculate the power used in a half-hour period. Similarly, for gas the flow is measured at regular intervals. This information can be sent to your In Home Display and to your supplier. Different communications technologies may be used in different kinds of premises for the Home Area Network to communicate with your In Home Display, and different technologies will be used in different parts of the country to allow the Wide Area Network to send data to and from the company providing the communications.

As well as measuring energy, meters are constantly monitoring their own performance and environment. For example, they will report if they have an internal memory problem and report if the terminal cover is removed. In these cases, your supplier may send someone to your home after contacting you.

End to End Process

Simple diagram showing how meters and IHD connect.

The information from your meter goes first into a communications hub that is usually built into the electricity meter, and then through radio waves to the communications company. In the case of the SMETS 2 meters, it is the Data Communications Company (DCC). From there it is sent on to the various DCC Services users who have a need for the data.

Diagram of Smart Meter in House to DCC to Supplier process.
The Smart Meter end to end journey

We will now explain each leg of the end to end journey shown in the diagram above.

In your Home

In your home as an energy customer, you will have a smart meter for electricity and a smart meter for gas (if you're dual fuel). Both meters communicate with a communications hub which is normally a part of the electricity meter however, it could be separate if your gas smart meter is installed first. To power the communications in the gas meter a battery is used as it would be dangerous to use mains electricity.

In addition, you will have an In Home Display which is powered though the mains and communicates with the meters through the same communications hub. In the future, more gadgets could use the communications hub, provided they have the right security credentials.


With prepayment, instead of getting a monthly bill for your energy, based on what you've used, you pay for your energy up front and load money as credit onto your electric and gas meters. Electricity and gas can be topped up separately depending on your priorities.

This means that you can lose your supply of electricity or gas if you run out of credit.

Smart Meters can be switched by the supplier between credit mode and prepayment mode. They offer great support for prepayment or Pay As You Go (PAYG). You can top-up in a number of ways:

  • Online Top-Up - Easily top up your meter online through your supplier's website.
  • App Top-Up - Easily top up your meter online through your supplier's app on your mobile phone.
  • PayPoint - Present your top up number at your local PayPoint shop.
  • Payzone - Present your top up number at your local Payzone shop.
  • Post Office - Present your top up number at your local Post Office.
  • Over the phone - Top up on your supplier's automated telephone line, with no need to join a queue to speak to anyone.
  • SMS Text - Some suppliers allow you to top up with a text message, having registered your payment cards first.

To top up you must provide your top up number (20 digit PAN or Primary Account Number) as a reference. You can do this by:

  • Using the barcode from your suppliers app
  • Read out your top up number
  • Show your top up card.

When you buy credit, it will usually reach your meter within 40 minutes.

If the signal in your home is too low to pick up your credit, you can add it yourself. You'll need to use the 20 digit UTRN (Unique Transaction Reference Number) or VEND code on your payment receipt.
The means of entering this number into your IHD or meter can be complicated and differs between devices - see your supplier's website for information on how to do this.

Note that PayPoint and Payzone offer the same service to suppliers, so most suppliers will only offer one or the other - check with your supplier which service they use.

Types of Prepayment Credit

Most meters warn you when your credit falls to £2. If you can't afford more credit or are unable to top-up, most meters provide £10 of Emergency Credit for gas or electricity. Suppliers also offer Friendly Credit on smart meters during certain periods - mainly overnight, weekends and Bank Holidays. This means that if you accidentally run out of credit, the meter won't cut you off during these periods.

  • Normal Credit - you receive when you top up.
  • Emergency Credit - (£10) you can activate on your smart meter or IHD (In Home Device) when you run out of normal credit but are unable to top up.
  • Friendly Credit - available automatically on smart meters during certain periods. This feature means that the meter won't cut you off during the Friendly Credit periods for your meter - mainly overnight, weekends and public holidays.

For Friendly Credit to operate you must have some Normal Credit or Emergency Credit at the start of the Friendly Credit period.

Note that you will have to repay the amount of Emergency Credit or Friendly Credit used at your next top up.

Data Communications Company (DCC)

Logo of the Data Communications Company (DCC)

To minimise costs for the long-term use of SMETS 2 meters the DCC went out to tender for the communications network having split the country into regions for this purpose. So, depending on where you are you could have one of two companies communicating with your meter, Arqiva Limited in the north and Telefónica (better known to us as Virgin Media O2) in the central and southern regions.

Once received by the DCC, the data is processed by the Data Services provider, currently CGI UK Limited. Overall, the whole of DCC is facilitated by Capita plc.

DCC Service Users

From the DCC, the Smart Meter messages can be sent to various Service Users depending on the messages content. Electricity and gas suppliers and distribution network operators will all have a keen interest in the data from Smart Meters. They will use it for the following reasons:

  • Suppliers
    • Meter readings - for billing purposes.
    • Half Hourly readings - for additional services or sophisticated products.
    • Maintenance messages about the health of the meter - such as memory problems.
    • Firmware messages - to update the software in the meter.
    • Configuration messages - to set up new products.
    • Pay As You Go messages - to top up PAYG credit.
    • Tamper messages - to detect theft and security attacks.
    • Export meter readings - to measure how much electricity your solar cells or wind turbine is passing back to the network for load management and to credit the customer, depending on the commercial arrangement.
  • Distribution Network Operators
    • Power outage messages - to know when and where outages occur.
    • Meter readings - for network billing to suppliers.
    • Half Hourly readings - for network load planning.
    • Voltage, Current and Power Factor readings - for network operation and planning.
    • Export meter readings - for network operation and planning.
  • Other Authorised Parties
    • Meters readings - to analyse and show you your energy usage.
    • Half Hourly readings - to analyse and show you your particular energy profile shape. See our Smart Meter Data page.

Please note that the next sections are more technical so stop reading here if you wish.

Firmware Updates

Firmware is a class of software which used to control a device's specific hardware. The firmware can be updated to remove bugs and add features, although the ability to add features is constrained by the memory capacity of the hardware device.

On a Smart Meter system various modules can receive an application firmware update triggered remotely:

Ability to Update Firmware Remotely
Device Updatable
Communications Hub Updatable
Electricity Meter Updatable
Electricity Metrology Not Updatable
Gas Meter Updatable
Gas Metrology Not Updatable
In Home Device Updatable

The metrology firmware cannot be updated remotely as this would invalidate the Meter Certification process through which the accuracy of the meter including the metrology firmware is tested.

Firmware updates (like updates to your mobile phone or computer) are provided by the manufacturer of the device and are delivered one at a time to the communications hub and then passed to the relevant device. They can take a long time, as compared to the data transferred for normal communications, firmware updates contain a huge amount of data.

Currently updates happen regularly, and are invisible to the customer.

Five Port Meters

Image of a 4 terminal and a 5 terminal meter

A five port meter is an electricity meter with an extra terminal which is usually wired up to alternative heating solutions such as storage heaters or underfloor heating on an Economy 7 tariff. The fifth terminal is automatically powered on during the off-peak hours of your tariff.

Whether the power is on for the extra port is determined by the Auxiliary Load Control Switch Calendar in the meter which can be updated by your supplier. Suppliers have additional commands to override the fifth terminal switch:

  • Open Auxiliary Load Control Switch - Open the switch for a specified time period and then revert to the Auxiliary Load Control Switch Calendar.
  • Close Auxiliary Load Control Switch - Close the switch for a specified time period and then revert to the Auxiliary Load Control Switch Calendar.
  • Reset Auxiliary Load Control Switch - Revert immediately to the Auxiliary Load Control Switch Calendar.
Switching times are randomly varied between 0 and 1,799 seconds on each meter so that all loads do not come on at the same time, reducing the stress on generation. See below...

Randomised Offset

If the switched loads on meters turned on and off at the same time (Economy 7 is an example) it would cause problems for generation and the supply network. To prevent this happening switching times are staggered through a Randomised Offset value set in each meter and can vary between 0 and 1799 seconds (approximately ½ an hour).

Randomised Offset = Randomised Offset Number × Randomised Offset Limit
Randomised Offset
The product of the values, rounded to the nearest second is the Randomised Offset time. This can vary between 0 and 1799, and is applied to the tariff switching table times and the Auxiliary Load Control Switch switching times. Basically the delay can be up to a half hour.
Randomised Offset Number
This is a random number between 0 and 1 stored permanently in the meter.
Randomised Offset Limit
This limit controls how long the delay could be and can have a value between 0 and 1799, but the industry seem to have agreed that this should not be less than 600. This value can be set remotely via a command.

Manually Switched Loads

The fact that the Randomised Offset value cannot be viewed can be an issue where customers want to manually control an external load to coincide with switching times.

For example if you manually set up a timer to turn on your load at 00:30 when the cheaper rate kicks in, the higher rate period may extend to 01:00 because of the Randomised Offset. If you are manually switching loads our advice would be to play safe and assume a 30 minute delay in switching. For example if a tariff that says the cheaper rate is from 00:30 to 07:30 set your timer to 01:00 to 07:30. You must also check if the tariff is GMT or clocktime based when doing this.

SMETS Meters provide a way around this as they provide a mechanism to control loads for switching. Unfortunately we have not seen this put into a practical example yet.

Billing is still accurate as this uses the registers and associated rates.

Registers vs Half Hourly Data

Note that the Randomised Offset is not applied to half hourly data so the half hourly data will not line up with the registers if Randomised Offset is not taken into account. This is difficult to resolve as the value of the Randomised Offset cannot be viewed.

(Page updated: 2024-02-24)

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