What are Prepayment Meters?
If you are not too familiar with prepayment meters and how they work, read our guide as we break down the benefits and drawbacks of this type of meter.
Prepayment meters allow businesses to pay in advance for gas and electricity, meaning they would only use what has already been paid for. This type of meter is most commonly used for businesses looking to clear existing debt.
How do they work?
With a prepayment meter, the display shows your remaining credit and standing charge. It also includes emergency credit, provided by your supplier, to help prevent your supply from being cut off.
Benefits of this meter can include having greater control over your daily energy use, though you'll typically find that you'll pay higher rates, compared to smart meters. This is a common reason why businesses choose to switch out their prepayment meters for smart alternatives. With accurate readings and the ability to monitor monthly bills, customers often find that smart meters bring similar control over their energy use.
Prepayment Advantages & Disadvantages
| Advantages | Disadvantages |
|---|---|
| More control over your energy spend
Pay upfront so you only use energy you’ve already paid for. |
Higher costs
Prepayment tariffs can be more expensive than credit tariffs. |
| Better cash flow control
Top up when it suits your business cash flow. |
Risk of running out of credit
Forgetting to top up could interrupt your supply. |
| Lower risk of debt
Paying in advance helps avoid energy debt. |
Less convenient
Manual top-ups may not suit busy businesses. |
| Clear view of usage
See how much energy you’re using in real time. |
Fewer tariff choices
Not all suppliers offer competitive prepay deals. |
| No estimated bills
You only pay for what you actually use. |
Emergency credit is limited
Any emergency credit is repaid on your next top-up. |
What are the most common meter types?
The most common meters you will find are:
Traditional meters: these are older meters that require manual readings and are typically linked to the prepayment option. However, with newer meter options, prepayment can be managed through an app or online, removing the need for a key or card to top up your energy.
Smart meters:
are digital gas and electricity meters that automatically send usage to your suppliers. This eliminates estimated bills and ensures customers are billed accurately based on the energy they actually use throughout the month.
Half-hourly meters: up until this year, half-hourly meters were typically used only by larger businesses with high energy usage. There is only a slight difference between smart and half-hourly meters. Smart meters record data less frequently, sometimes daily or monthly, as opposed to half-hourly meters, which record data every half hour, allowing for more accurate and precise energy usage.
Overview
Prepayment meters offer control and can help clear debt, but most businesses prefer smart meters for easier management and access to better tariffs.
Your supplier should allow you to switch to a smart meter as long as you are not currently in debt. For some multi-function meters, the switch can be made electronically without equipment changes. If you have an older prepayment meter, a technician may need to physically install a new smart meter. If you are unsure how to start the switch, contact us. We will review your specific metering situation and walk you through each step of the switching process.
A smart or half-hourly meter provides better monitoring and more accurate billing without the need to top up. You will also receive real-time energy data, allowing you to track your business's monthly energy usage.
Previously, only larger businesses had access to half-hourly meters, but with the market-wide half-hourly settlement (MHHS) scheme, the rollout of smart meters began in October 2025 (due to finish in July 2027). This then allows businesses and households to monitor their energy usage every half hour. This initiative, led by
Ofgem, aims to combat energy waste and allows consumers to pay for the energy they actually use rather than relying on estimates which will help with the UK’s net zero goals.
How can we help?
If you need help with your business gas or electricity, get in touch with us!
If you would like a free quote, please fill in the box below, or…
Contact us on 0161 521 3400 or email us at info@purelyenergy.co.uk
Written By Faith Labong at Purely Energy
