£40 payouts given to smart meter households in March

Everyone with a smart meter will be eligible for £40 payments under a new rule now in place from energy regulator Ofgem. Households which have to wait more than six weeks for installation, or who have a smart meter which is broken and not fixed within 90 days, will be eligible for the cash.

Sweeping changes to smart meter rules are a move which Money Saving Expert founder Martin Lewis has welcomed.

Ofgem Suppliers are now required to make an automatic payment of £40 to consumers if they fail to meet the minimums outlined in the Guaranteed Standards. This includes making and keeping appointments, investigating and fixing/replacing credit or prepayment meter faults, and switching suppliers within five working days. The announcement confirms that these will now be extended to include smart meters.

They will also be eligible if their meter is faulty or not operating in smart mode, and this isn't fixed within 90 days.

The plans are part of the regulator's crackdown on broken smart meters, which has led to the enforcement of repairs or replacements for more than 900,000 faulty smart meters.

It is thought that millions of smart meters have been left in so-called 'dumb mode', where they have poor connectivity or stop automatically transmitting readings.

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."

She added: "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."

Reacting to the package of reforms, Martin Lewis, founder of MoneySavingExpert.com, said: "Broken smart meters were high on the list of issues I raised with Ed Miliband when he first became Secretary of State.

He promised me he'd investigate, so I was pleased when they told me this announcement was coming.

"Far too many smart meters, likely one in five, don't work as they should - a problem not just for all the homes with broken ones, but for the smart meter rollout. With so many dissatisfied customers, word-of-mouth is bad, so people tell their friends and neighbours not to get one.

"We need to shift firms' focus from just installing smart meters to promptly fixing those that are broken - not just meters that go into dumb mode, but crucially all elements, including in-home displays that stop working.

That's the aim of this plan, and while it's taking a softer approach than we proposed, it is an improvement and we'll be monitoring to see if it delivers.

"I'm also happy the Government has taken up our suggestion of a Consumer Charter, giving people definite rights and timetabling, and look forward to working with them to make sure consumers understand it when it launches."

Melissa Giordano, Deputy Director of Systems and Processes at Ofgem said: "Smart meters offer customers accurate bills, cheaper tariffs, and real-time energy use tracking.

"Every customer who wants a smart meter should get one quickly, and it should work from day one. These new rules will set clear expectations of suppliers, drive better performance, and protect consumers when things go wrong."