‘Not in my basement’: Why has Germany been so slow to adopt smart meters and what’s it costing?

Only around five per cent of German households have a smart meter – compared to almost universal rollout in many other EU nations. Germany has one of the slowest smart meter rollouts in Europe. Just 5.5 per cent of households have one as of December 2025, compared with more than 90 per cent in France, Italy, the Netherlands and Spain, and 63 per cent on average EU-wide. This makes it harder for Germany to shift energy use toward times when renewables are abundant, contributing to the country’s wasted wind and solar – and to Germans paying some of the highest energy bills in Europe. With recent data from the Energy Institute revealing that Germany generated more power from wind and solar than from fossil fuels last year for the first time, grid flexibility solutions like smart meters are only becoming more important. So what’s behind Germany’s sluggish smart meter rollout – and is it starting to gain pace? Why Germany opted out of the EU’s smart meter rollout When the EU’s 2009 Third Energy Package set a target for smart meter rollout across the bloc, it came with an opt-out clause: if member states carried out an analysis showing the economic costs outweighed the benefits, they’d be exempt. With data privacy debates raging in Germany, the collection of additional personal data within the home was a politically unpopular policy. The German government commissioned consultancy firm Ernst & Young to carry out a cost-benefit analysis. The 2012 study warned that installation costs would outweigh potential energy savings for households. It argued that local grids weren’t prepared to manage the instability of intermittent renewables, and recommended a phased, market-driven rollout rather than an accelerated one. Fast-forward 14 years, and the country is rethinking its approach. The massive build-out of wind and solar means supply now frequently outstrips demand, leading to negative electricity prices on the wholesale market – which in turn disincentivises investment in renewables. It also contributes to Germany’s curtailment bill, as renewable generators either switch off to avoid financial losses or are paid by the government to do so. In 2025, the country spent around €435 million compensating renewable generators for curtailment. Smart meters could help Germany consume rather than waste this excess power, while letting households and businesses take advantage of low-cost electricity through flexible tariffs. “It’s difficult to incentivise people to flex their demand if you don’t have a smart meter,” says Jan Rosenow, a Professor of Energy and Climate Policy at Oxford University. ‘Spionagezähler’: Are smart meters a privacy risk? Historic weaponising of personal data in Germany has left citizens especially wary of data sharing, and this has bled into sentiment about smart meters. “There’s certainly a lot of scepticism about smart meters – rightly or wrongly – around data sharing and privacy,” says Rosenow. “There was lots of media noise about how smart meters would be used to spy on you.” Headlines warning of “Spionagezähler” (spy meters) in household basements, turning residents into “gläserner Mensch” (transparent people), fed fears of unnecessary surveillance. So are those fears valid? “Smart electricity meters can, in principle, provide high-resolution data on the electricity consumption of a household,” says IT security expert Dr Christoph Sorge, professor of Legal Informatics at Saarland University. In practice, though, this granular detail isn’t collected: smart meters typically gather data every 15 minutes rather than every second. “These are still detailed enough to detect when devices like washing machines, dryers, or flow-through heaters are running, and can be used to infer whether people are present in the household or not,” Dr Sorge tells Euronews Earth. Unauthorised access to this data could hypothetically see it misused by, for example, insurers, marketers, law enforcement or malicious actors. “As with all computers, there is at least a theoretical risk that an attacker can manipulate them so they transmit higher-resolution data than they are supposed to,” Dr Sorge explains. He describes the worst-case scenario as largely unchanged since the 2012 backlash – but believes the probability of it actually happening has fallen since then, as EU and national rules on smart meter privacy have strengthened. How are smart meters protected against bad actors? Since the initial 2012 backlash, both data protection and cybersecurity regulation have evolved significantly. A non-binding EU recommendation on smart meter privacy has been replaced by a binding legal framework. Illegal processing of smart meter data in the EU is now subject to considerable General Data Protection Regulation (GDPR) fines, and smart meter gateways are covered by the EU’s Cyber Resilience Act, which mandates cybersecurity-by-design and mandatory incident reporting; ‘critical products’ like these will need to fully comply by December 2027. Germany has gone further still: the Metering Point Operation Act requires a security certification for smart meters, and the BSI (Federal Office for Information Security) requires data to be processed locally and encrypted, with only figures relevant to billing shared by default. “Overall, there is now quite a comprehensive legal framework that requires significant technical protections for smart meters,” says Dr Sorge – to the point that, he adds, “I do not think security and privacy concerns are still a very relevant issue today.” Higher security means a slower rollout – and higher costs Germany is currently off-track of its target to fit smart meters in 90 per cent of the homes legally required to have one by 2032, with many operators already missing 2025 milestones. Strict certification requirements have contributed to this by slowing the rollout and raising costs. That’s led policymakers to consider a ‘Smart Meter Light’ – a stripped-down device that can communicate consumption data and enable dynamic tariffs, but lacks the control hardware to automate savings by remotely switching devices on or off. The idea was pushed by the Smart-Meter-Initiative (SMI), a coalition of four digital green-energy suppliers – Octopus Energy, Tibber, Rabot Energy and Ostrom – whose business model depends on selling dynamic tariffs to exactly the households currently locked out by the slow rollout. They argue these stripped-down devices shouldn’t be held to the same strict security rules as full smart meters. Germany’s coalition government has adopted the concept as part of its July 2026 reform package for households outside the mandatory rollout, though it stresses the goal is a device that’s simplified, low-cost and cybersecure, not necessarily one built on relaxed certification. Critics warn that any deviation from existing security standards risks disruption: “Without uniform standards, we’ll end up in chaos,” says Frank Borchardt of technical regulatory body VDE FNN, who argues existing tools – like sharing one smart meter gateway across many meters in an apartment block – should be used instead. Others see it differently: Andy Bradley of energy consultancy LCP Delta calls smart meter light “an important trigger to enable dynamic tariffs and residential flexibility in Germany”. Do the financial benefits of smart meters outweigh the costs? Even with the mounting security costs, the potential upside of smart meters is substantial. “In the UK, where we have a lot of flexible tariffs and smart meters, you can easily save 20 to 30 per cent by just charging your EV in a flexible way, or using your heat pump flexibly – preheating, precooling,” says Rosenow. “In Germany, if you don't have a smart meter, you just wouldn’t be able to do that.” Even a partial shift adds up. A 2023 report by German think-tank Agora Energiewende found that if German households used electric cars, heat pumps and home storage flexibly, system-wide savings by 2035 could reach roughly €10 billion a year – split between €5.4 billion in reduced fuel costs and €4.8 billion in avoided grid expansion costs. The same study found households with dynamic tariffs could save €600 a year in the long term.