Ofgem Plans New Compensation Rules for Faulty or Delayed Smart Meter Installations

Ofgem is preparing to roll out a new set of rules that will give customers automatic compensation when smart meter installations go wrong or take longer than expected. The move follows the energy regulator's announcement in March that it would review its Guaranteed Standards of Performance.

Under the updated framework, which is set to come into effect in 2026, four new standards will be introduced. The first covers situations where a customer is left waiting more than six weeks for a smart meter installation appointment. The second applies when an installation fails due to a fault on the supplier’s side. The third kicks in if a supplier does not provide a resolution plan within five working days of a customer reporting a problem. The fourth addresses cases where a smart meter is not operating in smart mode and remains unaddressed for more than 90 days.

Charlotte Friel, Director of Retail Pricing and Systems at Ofgem, said: “Millions of consumers rely on their smart meter every day for accurate billing, cheaper tariffs, automatic meter readings and real-time data to help keep track of spending.

“But we know many customers that want a smart meter wait too long to get one installed or face delays on repairs when it stops working – this needs to change. These new rules are about setting clear expectations of suppliers, incentivising them to boost smart meter standards, and protecting consumers from poor service if things go wrong.”

If any of these situations occur, customers will receive an automatic payment. At present, the Guaranteed Standards require suppliers to pay £40 to customers whenever the minimum service level is not met. These new rules will expand the scope of protection.

Commenting on the news, Minister for Energy Consumers Miatta Fahnbulleh said:  “Consumers are at the heart of our mission to deliver an energy retail market that works for everyone, as we accelerate towards a clean, homegrown power system to protect households against global fossil fuel price spikes.

“That’s why the government is taking action, alongside Ofgem, to ensure families are better protected when they get a smart meter installed. This marks another step in our work to bring down bills for working people and rebuild consumers’ confidence in the energy sector.”

The announcement follows the release of government figures showing that two-thirds of UK households now have a smart or advanced meter. Of those, more than 90 per cent are functioning correctly. Ofgem’s compliance efforts have already resulted in more than 600,000 faulty meters being repaired or replaced.

This update arrives just days after the Government confirmed a new benefit for households located near major energy infrastructure. Under the Planning and Infrastructure Bill, homes within 500 metres of newly built or upgraded electricity transmission lines will be entitled to receive up to £250 a year. The payments will be made in two instalments of £125 every six months for up to a decade.

The initiative, informally dubbed the “pounds for pylons” scheme, was first unveiled in March. It is designed to offer a tangible benefit to residents living near large-scale energy projects, with the hope that it will reduce local opposition and expedite delivery.

Ofgem is also looking ahead to bigger changes in how energy is measured and billed. In 2027, the Market-wide Hourly Settlement will be introduced, requiring suppliers to use highly accurate consumption data to create more flexible tariffs. These tariffs will allow customers to time their energy use to coincide with periods when prices are lower, helping them save money while easing demand on the grid.

This follows the development of the Market-wide Half-Hourly Settlement Programme, which aims to match supplier trading more closely with actual energy use across the UK. By October 2026, all meters for domestic and business customers will be required to record and submit half-hourly data, paving the way for a more efficient and responsive energy market.