Households with smart meters could receive automatic £40 payments each time they encounter one of three particular problems, as new regulations come into force. However, Ofgem is still considering an additional issue that might be added to the eligibility list later this year.

Previously, companies simply had targets for fitting smart meters for customers, leaving many with faulty devices and poor customer service. These new rules - introduced today (Feb 23) - are intended to force energy firms to prioritise repairs and guarantee every smart meter functions properly.

Problems that can result in £40 compensation:

• Waiting more than six weeks to have your smart meter installed
• Installation appointment fails due to fault within the supplier's control
• You don't receive a 'resolution plan' within five days of reporting an issue with your smart meter

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."

The first category only applies to new or first-time installations. It does not cover situations where you are waiting more than six weeks for an appointment to repair or replace your smart meter.

Issues deemed 'within a supplier's control' for the second category encompass scenarios such as not having an engineer with the necessary expertise on hand or being without the correct equipment to safely complete the installation.

Resolution plans must detail the actions the company has undertaken to evaluate the issue you've flagged and the steps the business is taking to resolve it. Resolution plans cover both smart meters and connected in-home devices.

Ofgem first put forward these smart meter compensation proposals in August 2025. Initially, the list of circumstances triggering automatic compensation also featured smart meters operating in 'dumb' mode.

These are smart meters that cannot send readings to the supplier. The original proposal indicated households would be eligible for compensation if this wasn't resolved within 90 days, but this provision remains under review.

According to MoneySavingExpert, Ofgem stated it "intends to take forward further work" on the issue "with a view to implementing it later this year". The regulator is, however, waiting for the Government's response to its own examination of smart meter performance standards.

Should you experience one of the qualifying issues, your energy supplier should pay out the £40 compensation within 10 working days, and you won't need to do anything to claim it. It may be credited directly to your energy account or paid straight into your bank account, with your supplier determining which method is used.

If you find yourself still waiting after 10 working days, you could be entitled to a further £40 on top of the original payment - though this additional sum will only be awarded once per incident.