What is a prepayment smart meter?

What is a prepayment smart meter?

Even if you pay upfront for your energy, you can reap the benefits of smart meters. Are prepayment smart meters right for you? Let’s find out more.

Standard smart meters that display your energy use in real-time and communicate with your supplier are by far the most popular type of smart meter. But they’re not the only type. For example, if you’re on a prepayment tariff with your energy supplier, you can get a prepayment smart meter which brings a whole new set of benefits. With a prepayment smart meter, the days of topping up your meter key at the corner shop are over. 

In this article, we’ll look more closely at prepayment smart meters. We’ll examine what they are and how they work. We’ll also look at the pros and cons of this type of smart meter. Let’s get started.

What are prepayment smart meters?

Smart meters are new energy meters currently being fitted in UK homes and businesses, replacing old-style legacy meters. They work in conjunction with an in-home display module that shows your energy consumption in real-time, as well as how much you’re paying for your power. Smart meters transmit data on your energy consumption to your energy supplier, who can also monitor it.

They bring several benefits to users, including

  • Accurate billing – no more estimated bills
  • Convenience – say goodbye to manual meter readings
  • Real-time energy use information nudges you towards saving energy – great for your bank account and the planet

Today’s smart meters are capable of working in credit mode for customers who pay a bill for their energy, or prepayment mode for pay-as-you-go customers. They can replace the old-style prepayment meters that work with cards or keys. 

If you have a prepayment smart meter in your home, you’ll be able to see your energy usage on your display, as well as how much credit you have left on your account. Then, when it’s time to top up your account, you can do it online or using a smartphone app. 

Why might you need a prepayment smart meter?

Prepayment meters are often found in rented properties and student accommodation. If you’re renting your home, your landlord may prefer you to prepay for your energy rather than have a credit account. 

In some instances, energy suppliers force customers to go onto prepayment tariffs if they have struggled to pay for their energy in the past or if they have built up debt. Prepayment safeguards the energy supplier against future defaults, even if it is inconvenient for the user.

Finally, some people just prefer to pay as they go for their energy rather than be on an account. Prepayment makes it easy to budget for your power because you only pay for what you use.

The good news is, whatever reason you have for being on a prepayment energy tariff, you can swap your old-style card or key meter for a shiny new smart meter and start reaping the benefits. 

Benefits of prepayment smart meters

When you replace your old prepayment energy meter with a prepayment smart meter, you immediately gain several benefits, including:

  • Easy top-up – Say goodbye to dashing to the corner shop in the rain when you run out of money on your account. With a prepayment smart meter, you can top up online or using your mobile phone
  • Know your usage – Your new meter displays your energy use in real time, so you know exactly how much you’re paying for your power at that exact moment. It’s also easy to see when it’s time to top up, as your display unit isn’t buried in a cupboard
  • Save money – Smart meters nudge you into making better energy-saving decisions, which means your top-up will last longer
  • Save the planet – Reducing energy use is good for the environment as well as your bank balance
  • Simple to swap – If you want to move from prepayment to a credit-based energy tariff, you can do so without changing your smart meter

With benefits like these, it’s no surprise that almost 90% of prepayment smart meter users would recommend them. 

Disadvantages to prepayment smart meters

Of course, nothing is perfect. There are some disadvantages to using prepayment smart meters:

  • If you forget to top up your account and run out of credit, you may lose your power
  • Standing charges and per-unit charges tend to be more expensive on prepayment tariffs compared to standard credit tariffs
  • You have to regularly monitor your prepayment smart meter to ensure you don’t run out of credit

Customers that struggle with payment may be eligible for emergency support from their supplier. This is especially important during the current energy price crisis.

Have you got yours yet?

While there are some minor disadvantages, it’s clear that prepayment smart meters are a valuable addition to the smart meter family. They bring users significant benefits, including convenient top-ups and simpler energy use monitoring.

If you are a pay-as-you-go energy customer and you haven’t got a smart meter yet, you should be able to get one free of charge as part of the UK’s smart meter rollout. Contact your supplier today to see if you are eligible.

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