Energy firms face extra compensation payouts over new smart meter rules

Ofgem confirmed it will bring in new rules this month which will trigger a £40 payment for customers if they have to wait more than six weeks for a smart meter installation appointment, appointments fail due to a supplier issue or suppliers fail to provide a repair plan for malfunctioning meters within five days.

It is also consulting on proposals for compensation when smart meters are not operating in ‘smart mode’ due to errors for more than 90 days ahead of implementation later this year.

The new compensation charges come on top of existing requirements for energy suppliers to pay consumers £40 if they fail to meet minimum standards such as keeping appointments, investigating and fixing pre-pay meter faults, and switching suppliers within five working days.

Chris Martin, an energy industry expert with Pinsent Masons, said energy companies would now need to review their processes for fitting and repairing smart meters ahead of the new rules being implemented.

“As a result of these changes, licensed energy suppliers will potentially be exposed to more of these payments,” he said.

“It will be essential for energy providers to review their procedures around installation and supply of meters, as delays down the supply chain will now have an added impact on them.”

According to the latest government data, more than 70% of homes in Britain have a smart or advanced meter, and more than 90% of those are working correctly.

Ofgem said its compliance regime has already seen more than 900,000 misfunctioning smart meters repaired or replaced since 2024

“Every customer who wants a smart meter should get one quickly, and it should work from day one,” said Melissa Giordano, Ofgem’s deputy director of systems and processes.

“These new rules will set clear expectations of suppliers, drive better performance, and protect consumers when things go wrong.”