E.ON has announced it will be scrapping its standard variable tariff and moving customers to a one-year fixed rate deal instead, but only if they have a smart meter installed. It's the first of the 'Big Six' energy providers to ditch the expensive tariff. 

Instead of being moved onto the firm’s standard variable tariff, customers with a smart meter will be put on a one-year fixed deal which it promises will be cheaper.

The energy provider has 4.6 million customers and only 750,000 of those people have smart meters in their homes, a dismal 16%.

Criticism

E.ON's move has been criticised as a crafty tactic to get more customers using the smart meters, but with this new deal in place, it might just work.

[Read more: Do smart meters really offer good value?]

Standard variable tariffs are a horrendous rip-off and yet so many households are on them. The Government has even tried to step in and put a cap on them to keep customer bills under control.     

One of the main issues with smart meters is how unpopular they are with customers. Reports of meters going ‘dumb’ and concerns over privacy have put a serious dent in the Government’s £11 billion roll-out plan. 

Some of the Big Six energy firms have even admitted that a number of households just aren’t accepting them.

They're not alone – a good chunk of our readers think smart meters should be done away with altogether.

Replacing one bad deal with another?

The new deal could also come under fire from industry campaigners and organisations, depending on how E.ON handles it.

Citizens Advice chief executive, Gillian Guy, said:

“It’s a positive sign that E.ON has recognised that standard variable tariffs have had their day. However, this must not become a situation of one bad deal replacing another.

“E.ON needs to be absolutely transparent about the costs of any rolling fixed deal, and also be clear with customers about what happens when the fixed period ends.”