Under the government’s smart metering implementation programme, suppliers are required by their licence to take all reasonable steps to rollout smart meters to all homes and small businesses by mid-2021.

But the energy regulator found that SSE Energy Services failed to meet its smart meter installation target for 2019, before it was acquired by Ovo Energy in 2020.

Ofgem said it would not take formal enforcement action after Ovo voluntarily offered up the payment of £1.2m to the body’s consumer redress fund.

Last year, SSE paid £700,000 into the same pot for a similar failure.

In January, Ofgem warned nine energy suppliers that it would strip their licenses if they fail to join a scheme to allow households to take full advantage of their smart meters.

The failure of Ovo to meet its targets is not unexpected, Which? found in 2018 that large energy suppliers would need to triple their installations in order to match the government’s expectations.

The smart meter rollout has been rocked by mismanagement, spiralling cost and technological complications ever since the programme began.

The first generation of smart meter devices suffered from a number of technical issues, including weak mobile network signals and interoperability problems that meant they stopped working when consumers switched energy suppliers.

Tony Keeling, managing director of SSE Energy Services, said: “Today’s news relates to the reporting year of 2019, pre-dating Ovo Energy’s ownership of SSE Energy Services, which it acquired in 2020.

“Since Ovo’s acquisition of SSE Energy Services, we have significantly improved our smart meter rollout programme, to ensure that we can install smart meters in more homes across the UK – a crucial part of our Plan Zero strategy and the transition to net-zero.

“Ovo Energy has consistently met and exceeded all of its smart meter targets, with over half of its customers currently benefiting from the technology.”