New Smart Meter Rules for Business Energy Contracts: What Commercial Property Managers Need to Know

The Government’s final policy sets out a new contract condition for designated non-domestic sites. From 1 September 2027, when an energy supplier enters into a new fixed-term contract with a non-domestic customer, the contract must include a term saying that the customer has, or agrees to have, smart or advanced meters installed at their designated premises.

Suppliers are due to start communicating the policy from 1 January 2027. They must be fully compliant with the consumer protection code by 1 September 2027.

This is not a direction to replace every commercial meter now. The policy is limited to designated premises, and the contract requirement is tied to a new fixed-term energy contract.

The final response describes the initial policy scope as small and medium non-domestic sites, called “designated premises”. The consultation material’s working description used electricity meters in profile classes 1 to 4, or gas consumption below 732 MWh a year.

That description needs care. The final response says the Government intends to consider options for a new definition of designated premises in light of Market-wide Half-Hourly Settlement. Property managers should therefore treat the older definition as an initial screening aid, not as a permanent cut-off. Check the latest Government guidance and ask the supplier to confirm whether a particular site is in scope.

The policy recognises both smart and advanced meters. A meter described as “smart” in an old record is not necessarily enough to establish that it meets a supplier’s requirements. Ask the supplier to confirm whether the installed meter qualifies and whether it is operating as expected.

The dates relate to different parts of the policy:

• 1 January 2027: suppliers begin communicating the upcoming changes to non-domestic customers.
• 1 September 2027: the new fixed-term contract condition and the consumer protection code are due to apply.
• Before those dates: a supplier may already have its own contract terms or installation process. Those terms should not be confused with the Government’s implementation timetable.

The supporting Government policy guidance for commercial landlords and tenants covers cooperation, access and meter data. It recognises that a business tenant may need its landlord’s agreement before installation can be arranged.

A short portfolio review is more useful than a blanket replacement programme.

For each relevant supply, bring together the site address, electricity MPAN or gas MPRN, meter serial number, meter type, account holder, supplier and fixed-term contract end date. Flag any site where the meter type is unknown, the meter is not working properly, or the landlord or tenant has not confirmed who can arrange access.

Then contact the supplier for the specific supply. Ask whether the meter counts as smart or advanced for its policy, whether any installation is expected, who must agree to it, and how much time the supplier expects to need. Record the answer against the supply rather than relying on a general statement from a portfolio-wide email.

For sites approaching renewal, confirm the proposed contract terms before the customer accepts them. Where a Change of Tenancy is coming up, establish whether the supplier will be creating a new fixed-term contract in the incoming customer’s name. The Government’s stated trigger is a supplier entering a new fixed-term contract; a Change of Tenancy should not automatically be treated as that trigger without checking what contract is actually being offered.

If a meter upgrade may be needed, bring the tenant, landlord and supplier into the discussion early. Access, permissions or other work at the premises may affect timing. The supplier’s estimate and contract wording matter more than an assumed standard lead time.

The Government policy sets the intended contract condition and consumer protections. It does not set every supplier’s prices, appointment timetable or other commercial terms. Those details should be checked in the specific offer and contract.

If a supplier asks for an earlier installation or includes additional conditions, ask whether that is the supplier’s commercial offer or a requirement of the Government policy. Keep the answer with the contract record so the owner, agent and occupier are working from the same information.

The practical aim is to arrive at renewal with the supply, meter and decision-maker identified, rather than discovering an access or data problem while a contract is being agreed.

Does every commercial property need a new smart meter now?

No. The final policy is targeted at designated premises and sets a future contract condition. It does not require an immediate portfolio-wide replacement of all commercial meters.

Does a Change of Tenancy automatically trigger the contract condition?

Not on its own, based on the Government’s summary. The stated trigger is a new fixed-term contract. Ask the supplier whether the Change of Tenancy will result in a new fixed-term contract for that supply.

Can a supplier have different terms?

Yes. The Government policy and a supplier’s specific commercial offer are separate things. Review the actual contract and ask the supplier to explain any additional requirements.

• Department for Energy Security and Net Zero: Non-domestic smart meter rollout post-2025: government response.
• DESNZ: Annex B: Supporting Policy Guidance, including guidance for commercial landlords and tenants.
• DESNZ: original consultation document, used only for the earlier working description of designated premises.