From 1 September 2027, smaller businesses in Great Britain will have to have a smart or advanced meter, or agree to have one fitted, before they can sign a new fixed-term energy contract. Contracts signed before then aren't affected, and suppliers have to start telling customers about the change from January 2027.
The government confirmed the policy on 1 September 2026, after consulting on it between October 2025 and January 2026. If your contract comes up for renewal in late 2027 or after, this affects you. Here's what's changing and how to get ready.
What exactly is a "smart-contingent" contract?
It's a fixed-term business energy contract that only applies if you have, or agree to install, a smart or advanced meter. These aren't new. Some suppliers were already offering them, and the government says the rules exist to make the process "clear, consistent and fair for all organisations".
According to the government's regulatory assessment, the policy was a response to suppliers increasingly making fixed-term business contracts conditional on smart meter installation. Until now each supplier has done this its own way, and some have been reluctant to enforce the terms in case customers simply moved to a rival that didn't ask.
What are the key dates?
As of October 2026, the confirmed timetable is:
- 1 January 2027: suppliers must start explaining the upcoming changes, so business customers know what's expected of them, when and why.
- 1 September 2027: any new fixed-term contract a supplier agrees with a business at a covered site must include a term saying the customer has, or agrees to have, smart or advanced meters installed.
- 1 September 2027: suppliers must also comply in full with a legally binding consumer protection code.
The government's response says the policy only applies to contracts entered into after 1 September 2027. If you sign a fixed deal before then, it stays outside the new rule until it ends.
Which businesses does it cover?
For now, it applies to small and medium-sized non-domestic sites in England, Scotland and Wales. The regulations call these "designated premises". Public sector sites of a similar size are covered too. The government puts the number of smaller business and public sector sites at around three million.
Larger sites already work under separate rules. Big electricity and gas supplies generally have advanced metering anyway, and supply licence conditions already require some of them to.
Do I have to have a smart meter right now?
No. Under the current rules, suppliers have to offer smart meters but customers can say no. Parliament's Public Accounts Committee noted that consumers aren't required to accept a smart meter offer, and that's still the position until September 2027.
There's one exception to keep in mind. Suppliers have to fit a smart meter whenever there's a new connection or a meter needs replacing, so if your old meter fails or reaches the end of its certification, you'll probably get a smart one anyway.
What changes in 2027 is the price of saying no. You'll still be able to refuse a smart meter, but if you do, you won't be able to sign a new fixed-term contract.
What happens if I sign but don't go ahead with the installation?
It's the part to read most carefully in any new contract. In the consultation, the government described how suppliers enforce these terms. If a customer doesn't follow through on the installation, the supplier can take away the fixed-term deal and move them onto deemed or out-of-contract rates. Those rates are usually much more expensive than fixed contracts.
The government hasn't told suppliers exactly how to enforce smart-contingent terms. They will have to follow a new Retail Energy Code Consumer Protection Schedule from 1 September 2027, though. It requires suppliers to:
- enforce the terms fairly and proportionately
- give you a chance to explain your circumstances before acting
- not penalise you for delays you can't control, such as a landlord refusing permission or the equipment or installation failing
- take all reasonable steps to move your installation forward
The code also covers appointment arrangements and requires suppliers to take financially vulnerable organisations into account.
I rent my premises. What if my landlord says no?
Tell your landlord before booking an installation, especially if you're in a shared building or the meters sit in a communal intake room. Refusal by a commercial landlord is one of the situations the government's response specifically addresses. Under the new protection code, suppliers shouldn't penalise you for delays caused by a landlord refusing permission.
Keep a written record. If your landlord refuses, get it in writing (an email is fine) and send a copy to your supplier. That way you've got evidence if the supplier later questions why the installation hasn't happened.
What if I already have a smart or advanced meter?
Then you probably won't need to do anything, since the rule accepts either a smart or an advanced meter. Do check that it's actually working, though. Government data showed that 8.3% of smart and advanced meters were running in traditional mode at the end of September 2025. That means they weren't sending readings automatically.
Signs your meter has stopped working in smart mode:
- your bills say "estimated" when they shouldn't
- your supplier asks you for manual readings
- the display shows no recent data
If any of that sounds familiar, report it to your supplier in writing. Under the post-2025 framework, the government expects suppliers to get meters that have dropped out of smart mode working again quickly.
It's also worth knowing which generation of meter you have. Second-generation (SMETS2) meters keep working in smart mode when you switch supplier. Older first-generation meters may not, unless they've been moved onto the national data network.
Are there any benefits to getting one sooner?
There are a few practical ones. Smart meters send readings straight to your supplier, so bills are based on actual use rather than estimates, which cuts the risk of a large catch-up bill. Since rule changes in 2022, business customers (and anyone they nominate) can also ask for up to 12 months of their historic smart meter data free of charge. That's useful for spotting waste or checking a quote against what you really use.
There's a timing benefit too. In late summer 2027, lots of businesses will be renewing at once. If your meter's already fitted and working, renewal is one less thing to worry about.
What to do next
- Check your contract end date. If it ends on or after 1 September 2027, the new rule will apply to your next fixed deal.
- Find out what meter you have. Look at the meter itself or a recent bill, or ask your supplier whether it's smart, advanced or traditional, and whether it's communicating.
- Look out for supplier letters from January 2027. Keep them, as they should explain what your supplier expects and by when.
- Talk to your landlord early if you rent, and get any refusal in writing.
- Read the smart meter clause in any new contract. Check the installation deadline, what happens if it's missed, and what counts as a delay outside your control.
- Write everything down. Note appointment dates, missed visits and anything else you've told your supplier.
- Complain if you're treated unfairly. Use your supplier's complaints process first. If it isn't resolved, small businesses can usually take the complaint to the Energy Ombudsman, and Citizens Advice can give free advice along the way.
This is general information, not financial advice.