Business Energy Glossary
What is a SMETS2 smart meter?
A SMETS2 smart meter is the second-generation UK smart meter standard, defined in the Smart Metering Equipment Technical Specification version 2. SMETS2 meters communicate with the supplier and the central settlement system via the Data Communications Company (DCC) network, record consumption in 30-minute periods, and remain operational regardless of which supplier the customer is contracted with. SMETS2 replaced the earlier SMETS1 standard, which lost smart functionality when customers switched supplier.
The smart meter rollout in Great Britain is a government programme, with Ofgem enforcing suppliers’ licence obligations. SMETS2 meters are now the standard installation for both domestic and small business customers. The rollout supports more accurate billing, time-of-use tariffs, and the upcoming Market-wide Half-Hourly Settlement.
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What SMETS2 is
A smart meter is a digital gas or electricity meter that records consumption in detail and sends readings to the supplier remotely, with SMETS2 the current standard in Great Britain. It enables accurate billing and time-of-use tariffs for business sites.
For the full explanation, see Smart Meters for Business Explained.
SMETS2 is a technical specification for smart meters set by the UK government. It defines the hardware, communications, and data-handling requirements that every UK smart meter must meet. The current version (SMETS2) is the second iteration, replacing SMETS1 which had limitations on supplier switching.
A SMETS2 meter has four functional components: the electricity meter itself, the gas meter where applicable, a communications hub that connects to the DCC network, and an in-home display (IHD) that shows real-time consumption to the customer. Each component communicates via standardised protocols so that any supplier can interact with the meter regardless of who installed it.
SMETS2 vs SMETS1
| Feature | SMETS1 | SMETS2 |
|---|---|---|
| Installation period | 2012-2019 (largely superseded) | 2019 onwards (standard) |
| Supplier switching | Smart functionality lost on switch until DCC enrolment | Smart functionality retained across switches |
| Communications | Direct supplier connection | DCC central network |
| Half-hourly settlement readiness | Limited | Full |
SMETS1 meters installed before 2019 are gradually being migrated to the DCC network as part of an industry programme, restoring smart functionality across supplier switches. The migration is administrative and does not require a meter visit.
The DCC network
The Data Communications Company is a regulated entity that operates the central smart meter communications network in Great Britain. Every SMETS2 meter connects to the DCC network via its communications hub. Suppliers, the customer in-home display, and the central settlement system all interact with the meter through the DCC.
The DCC network uses different communications technologies in different regions: cellular for most of the country, and a Long Range Radio network in northern Scotland and other harder-to-reach areas. The customer does not see the connection technology; the meter just works.
Smart meters for business
SMETS2 is rolled out to both domestic and small business customers. For business customers below the 100 kW HH metering threshold, a SMETS2 installation is the standard. For larger sites already on traditional HH metering, smart meter rollout does not apply because the existing meter already provides the required HH data through the meter operator network.
Multi-rate tariffs (Economy 7, time-of-use contracts) are supported by SMETS2 through remote configuration of the meter time switch. The customer can move between tariff types without a meter change, provided the underlying supplier offers the tariff structure.
Installation and replacement
A SMETS2 installation takes around 1 to 2 hours per meter point and is arranged by the supplier. The customer needs to be present at the property and provide access to the existing meter. The supplier appoints the installer; the customer does not pay for the installation directly. The cost is recovered through the standing charge across the wider customer base.
Replacement of an existing SMETS1 meter with a SMETS2 meter happens during normal supplier-initiated meter exchanges, typically when the SMETS1 meter reaches end of life or when the customer requests a specific change. There is no mandatory replacement date for SMETS1 meters.
Benefits and limitations
Benefits
- Accurate billing. The meter transmits actual reads, eliminating estimated bills.
- In-home display. Real-time consumption visibility supports active energy management.
- Multi-rate tariff support. Smart meters can be remotely configured for time-of-use contracts.
- Half-hourly settlement readiness. Supports the Market-wide Half-Hourly Settlement transition.
Limitations
- Connection issues. Some properties (basement meters, thick walls, weak cellular signal) have intermittent connectivity. The meter still records consumption but data transmission can be delayed.
- SMETS1 transition lag. SMETS1 meters that have not yet been migrated to DCC still lose smart functionality on switch until migration is complete.
- Compatibility with non-standard installations. Sites with unusual configurations (multiple flats on one meter, generation tied to meter) sometimes require traditional metering.
a SMETS2 smart meter FAQs
What is a SMETS2 smart meter?
The second-generation UK smart meter standard, capable of communicating with any supplier via the Data Communications Company network and recording consumption in 30-minute periods.
What is the difference between SMETS1 and SMETS2?
SMETS1 meters lost smart functionality when the customer switched supplier until they were migrated to the DCC network. SMETS2 meters retain smart functionality across supplier switches because they use the central DCC network from the start.
Do I have to have a smart meter installed?
Smart meter installation is not legally mandatory but suppliers are required by Ofgem to offer one. Customers can decline but may lose access to certain tariffs and pricing benefits. From 2025-2026, market-wide half-hourly settlement will increase the practical need for a smart meter.
How much does a smart meter cost?
There is no direct cost to the customer. The installation cost is recovered through the standing charge across all customers. The smart meter rollout is funded by the energy industry as a whole.
How long does a smart meter installation take?
Typically 1 to 2 hours per meter point. The customer needs to be present and provide access to the existing meter. The supplier arranges the installation date and installer.
What is the DCC?
The Data Communications Company is the regulated entity that operates the central smart meter communications network in Great Britain. Every SMETS2 meter connects to the DCC, which routes data between the meter and the supplier.
Can a smart meter switch off my supply?
SMETS2 meters include a remote disconnect capability that can be activated by the supplier for billing or safety reasons. The capability is regulated by Ofgem and can only be used in defined circumstances (unpaid debt with safeguards, safety concerns, customer request).
Do smart meters work in remote areas?
Yes, but the connection technology varies. Most of the country uses cellular. Northern Scotland and other harder-to-reach areas use a Long Range Radio network operated by Arqiva for the DCC. Customers do not need to know which technology is used.