NEWS

The UK government is consulting on a new framework that would dramatically change how non-domestic energy contracts operate going forward. If adopted, the proposal would prevent suppliers from entering into new fixed-term contracts with business customers unless the business has a smart or advanced meter installed. This would start from January 1st 2027.

In this article, we’ll look in more detail at what’s being proposed. We’ll also explain why it’s a good move for the industry. 

The cliff-edge

While this isn’t framed as a mandate (businesses won’t be forced by law to get a smart meter), it essentially is. Without a meter, access to fixed energy pricing and contract switching would disappear, creating a significant commercial impact. As many businesses’ energy contracts will expire in 2026, this issue needs to be settled now to avoid disruption.

The cliff edge where businesses won’t be able to secure new fixed-term deals is fast approaching. The consultation makes it clear that suppliers should not wait and encourages them to communicate with their customers now. 

Consultation proposals

The government’s current rollout framework for non-domestic smart meters ends in 2025, so the new consultation is to formalise a direction for the future. 

The goal is to accelerate uptake in the business sector, but without imposing too many mandatory rules that could make it difficult for companies to comply. As a result, the government is considering incentivising smart meters through the bottom line.

From January 1st 2027, energy suppliers would be prohibited from offering new fixed-term contracts to non-domestic customers unless a smart or advanced meter is already installed. Businesses that refuse to get a smart meter would not be able to access the best deals, which would negatively affect their overheads. They would remain on supply, but with far fewer options and less pricing certainty.

The consultation positions this as a proportionate move. It avoids forcing businesses to act, but at the same time, makes getting a smart meter a clever commercial choice. Companies will reap the benefits of a smart meter (more tariff options, more efficient energy use), while suppliers and the wider industry will benefit from more business data and a more responsive network.

Time to act

One of the strongest messages in the consultation is that early communication matters. Suppliers need to start talking to their non-domestic customers well before January 2027. December 2026 has already been highlighted as a key time for engagement.

The challenge is that fixed-term contracts do not all end neatly at the end of the year. Many businesses will need to renew throughout 2026. If they discover late in the process that a smart meter is now a prerequisite for the deal they want, their options narrow quickly.

There are several risks here:

• Companies may not be able to renew or switch to fixed-term contracts when existing agreements expire
• Customers could default to less suitable or more expensive tariffs
• Demand for smart meter installation could surge later in the year, creating bottlenecks

Installing smart meters on business premises isn’t always straightforward. You need to make time for planning, site access and specialist engineer availability. The consultation points out that a last-minute surge would be disruptive to both suppliers and customers.

With early communication, you can create a more managed transition. Suppliers can better control their installation schedule, and businesses can better manage their energy budgets.

Benefits of a business focus

The consultation also reflects a wider reality for the industry. In the domestic sector, smart meter coverage is high and slowing. The energy sector is now collecting vast amounts of household consumption data. At a system level, that data is already sufficient to support better forecasting, network planning and emissions reduction. The gains from installing more domestic meters are diminishing.

On the other hand, business consumption is far less visible. It is more variable, often more energy-intensive and more sensitive to time and operational patterns. Improving data quality in this segment delivers clearer system value.

If the industry can get more smart meters running on business premises, it can get:

• More accurate demand forecasting
• More efficient network operation
• More targeted decarbonisation initiatives

That’s why the new consultation is encouraging progress where it can make the most meaningful difference.

Looking to the future

The government’s new consultation for non-domestic smart metering signals a clear direction of travel. If businesses want the best commercial energy deals, they need to get smart meters and start providing the data the industry wants. 

It should be a win-win situation that benefits everybody, but it’s essential for suppliers and businesses to start thinking about it now to avoid disaster later. We hope the industry can avoid the cliff-edge and deliver a smooth transition.