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Are Smart Meters Worth Installing in 2024?

how does a smart electricity meter work

Smart meters were first introduced in the US in 2006. Since then, more than 94 million units have been installed, making US electric grids some of the most efficient there are. As smart meters play an important role in how your energy usage is measured, it is time to learn how smart meters work. Let’s head right on. 

What Is A Smart Meter?

A smart meter is a smart device that enables you to make more detailed, real-time readings of the energy you take from your energy supplier and the natural gas you pull from the pipes. Traditional meters did a good job, but as the energy usage increased in the US, so did the need for more careful monitoring of energy flow and the need to reduce energy losses. 

Smart meters increase the energy efficiency of the entire grid, which is something that a traditional electricity meter could not help with. Furthermore, smart meters help find the vampire spots of energy loss and can indirectly signal where maintenance works need to be done. Moreover, as smart meters communicate with the utility company at regular intervals, a few smart meters being offline in an area can signal a power outage – something that had to be reported by a phone just years ago. 

Overall, smart meters can be very beneficial for your household, utility company, and the grid. This is why the US is putting so much effort into switching every old electricity meter for a smart meter. Meter readings are updated regularly; you get real-time energy usage status and meter readings so that you can know how much energy you use per day, week, or even by the hour. 

How Does A Smart Meter Work?

Smart meters come from many different manufacturers and are meant to satisfy different segments of the market. Their primary function is that of measuring or reading your electricity and natural gas usage. However, a smart meter does the same thing continuously, and it updates the data over the DCC (Data and Communications Company). 

It is this communication that adds the time dimension to the readings and is important in understanding how your energy needs shift throughout the day. This data also helps your utility company make better future plans and understand where and how they need to make investments to ensure a reliable electricity supply. This has many benefits for you as a consumer. 

This automated meter reading (AMR) also reduces the utility company costs, as they do not need to send anyone to do the regular meter reading. It also ensures savings through closer monitoring of electricity usage and a better breakdown of energy bills. This helps establish an AMI (Advanced Metering Infrastructure). 

Advanced Metering Infrastructure is a grid operation and monitoring model that the US is switching to. It will help establish a smart grid and speed up the integration of more renewable resources into the power grid. Your energy supplier most likely supports smart meters, so if you want to get a smart meter, call and inquire. A smart meter installation is free and takes minutes. 

How Does Smart Meter Communicate? 

Smart meters establish communication with your utility company through a DCC – Data and Communications Company. To do this, smart meters will use one of the following two types of networks: 

  • HAN network – Home Area Network, or 
  • WAN network – Wide Area Network. 

A HAN network uses your WiFi to communicate how much energy you consume to the utility company. This will not put a big strain on your HAN, as the data bits are small. This is a secure channel for communication, as all the data is encrypted before it is sent out. 

A WAN network, on the other hand, is a network that is similar to the network that your cell phone uses. It covers a wide area (therefore the name) and uses secure, encrypted protocols to establish communication with the utility company. In both cases, your data is secure, and your energy consumption is closely monitored to ensure the most precise bills. 

Benefits of Using a Smart Meter

As smart meters are a new (but proven) technology that is being integrated at fast rates, it is important to know how smart meters work and what kind of benefits they have to offer. Some of the benefits of using smart meters include: 

  • Better and more accurate billing – no more mysterious kilowatt-hours, 
  • Better control over your energy consumption and less energy consumed, 
  • Saving money through being aware of your habits and how energy costs change throughout the day, 
  • Real-time monitoring, 
  • More money to invest in electricity and natural gas grid reliability, and 
  • Flexible payment options. 

Drawbacks of Using a Smart Meter

We’ve mentioned several times that smart meters collect data on your energy usage and communicate this data to the utility company. With some utility companies, this can happen as often as once every 15 minutes, every half-hour period, or hourly. For this reason, you may ask yourself: “Is My Smart Meter Data Protected?”

Yes, your smart meter data is protected. First of all, once you get a smart meter, it will communicate details on your gas and electricity usage, as well as the power produced by your solar panels, over a secure smart data network. This network, similar to a mobile phone network, uses encrypted protocols to secure your readings before it sends them. 

Secondly, once the utility has your data, the data is void of any personal information – your name and address are conjoined to the data later on in the billing process. This gives your utility company access to data to use to make the grid more reliable while at the same time saving your privacy. 

Yet another drawback is that smart metering does not work when there is no network available. In this case, your in-home display will keep displaying all the important data. And you’ve guessed it right; it will also save data and transmit it once the secure national network is available again. 

How To Read A Smart Electric Meter

Unlike a traditional meter, reading a smart meter is a bit different. As the meter readings are not always readily available on display, you may have to toggle to see your energy consumption and current energy use. Depending on how much energy you use every day, you may want to check your smart meter more frequently to ensure you learn about your energy needs and what you can do to optimize energy consumption. 

In general, smart meters have an in-home display that you should do the reading. Smart meters record quite a lot of data about your energy use, so make sure you understand how to read them. Your smart meter display will generally have 6-7 displays, and you may have to toggle through them to see all the data. 

What do the numbers mean on a smart meter? 

Your smart meter (either the in-home display or the outer unit) will typically have 6-7 displays. All of these are marked with numbers, so it is useful to know what these numbers mean. Here is a breakdown of numbers you can see on your smart meter: 

  • 1 – the test display – all fields will be on, 
  • 2 – CLS (CLOSED) if there is power, and OPN (OPEN) if the power is off, 
  • 3 – the average of how much energy you’ve used in that billing period. Some units may also display an average consumption level per billing cycle, 
  • 3b – The electricity that is being drawn from the network at that particular moment – the more appliances and devices you have up and running, the higher the energy use, 
  • 4 – the date in the US format, 
  • 5 – the current time in 24-hr format, and 
  • 6 – another display showing the status of the grid: CLS or CLOSED if there is power and OPN if there is no power. 

Will a Smart Meter Save Me Money?

Yes, smart meters can save you money, especially if you know how to read the data they provide you with. Namely, smart meters installed on your property (or more of them) let you know about your peak electricity usage. This usage almost always coincides with the peak energy price in your area, so learning about how much power you consume during this period of the day can help save on your energy bill. 

For example, you may see that your laundry machine, your dryer, and your dishwasher all consume approximately the same energy – around 2 kW per device. Using the ‘delayed start’ function, you can let them work at times when your energy is free or cheaper than it usually is. This will easily save you more than 100 kWh of electricity per month and reduce your power bill by $10-15 per month. 

Moreover, some smart meters (such as UK smart meters) can communicate with smart devices and turn them on when the energy costs are the lowest – typically, a water heater will be turned on when the energy price is closer to zero. This is another way to save a significant amount of money since water heaters are among the most power-hungry appliances in your home. 

Are Smart Meters Good for the Environment?

Smart meters are great for the environment. This new technology works with you and utility companies and provides both parties with data (as it can send meter readings automatically) that can be used to help the environment. A smart meter can: 

  • Help flatten the peak energy demand by letting you make more informed decisions, 
  • Help fight climate change by letting your know when the electricity is cheaper or even free, 
  • Help preserve energy and reduce fossil fuel consumption for electricity generation. 

How To Opt-Out of a Smart Meter Service?

It is not always possible to opt-out of a smart meter service. In most cases, you may not want to do so, as the benefits are numerous and save both your wallet and the planet. However, you may want to know what your rights are and what the answer to the question “Can I legally refuse to have a smart meter installed?” is. 

States with unique statewide opt-out policies: 

  • New Hampshire, and 
  • Pennsylvania. 

States with a statewide opt-out policy (you can opt-out): 

  • California, 
  • Maine, 
  • Maryland, 
  • Massachusetts, 
  • Ohio, 
  • Texas, and 
  • Vermont. 

States in which the energy system regulator or PUC (Public Utility Commission) decides on a case-by-case basis: 

  • Arizona, 
  • Florida, 
  • Georgia, 
  • Hawaii, 
  • Illinois, 
  • Indiana, 
  • Iowa, 
  • Kentucky, 
  • Louisiana, 
  • Michigan, 
  • Missouri, 
  • Nevada, 
  • New Jersey, 
  • New York, 
  • North Carolina, 
  • Oklahoma, 
  • Oregon, 
  • Rhode Island, 
  • South Carolina, 
  • Washington, 
  • Wisconsin, and 
  • Wyoming. 

States in which there are no opt-out policies in place – you are automatically enrolled in automatic readings: 

  • Alabama, 
  • Alaska, 
  • Arkansas, 
  • Colorado, 
  • Connecticut, 
  • Delaware, 
  • Idaho, 
  • Kansas, 
  • Minnesota, 
  • Mississippi, 
  • Montana, 
  • Nebraska, 
  • New Mexico, 
  • North Dakota, 
  • South Dakota, 
  • Tennessee, 
  • Utah, 
  • Virginia, 
  • Washington, D.C., and 
  • West Virginia. 

Can I Use a Smart Meter While Using Solar Panels? 

Yes, you can use a smart meter while using solar panels. In fact, if you are connected to the grid and have opted in for net metering, you will need a smart meter. In case you have solar panels, you will be able to track the net energy consumption on your in-home display. In-home displays in the next generation of smart meters will also give an electricity generation meter reading and grid reading so that you can rest assured that you are always informed on how much energy you’re using.

Is Smart Meter For Gas and Electricity Separate?

If you have gas and electricity service from the same utility company (or even separate), you will need to have both a meter for gas and electricity. This is because gas and electricity meters are different devices measuring different mediums. In both cases, smart meters communicate using safe protocols over a mobile network intended for this use – similarly to how mobile phones communicate with towers and other phones. 

What To Do For Homes With Poor Mobile Signal?

In homes with poor mobile signals, you can rest assured that your readings will be sent as soon as the network is available. If you have a second-generation meter, you will not be relying on a mobile network anyway – your smart metering will be done, and readings will automatically send through a different type of equally-secured network. Only first-generation meters rely on mobile phone networks. 


Do You Pay Monthly For A Smart Meter?

There are no upfront costs to owning a smart meter. Your electric utility installs the smart meter at its own expense, and this cost is covered through your regular monthly payments to the utility as it is. As installing smart meters with net metering and remote reading capability is a part of electrical grid modernization, it is the utility’s duty to do it with no upfront charge. 

Why is my smart meter red?

There are several reasons smart meters may be red. For one, smart meters blink red very quickly when your power consumption is very high. On the other hand, once you have exceeded your purchasing power in prepaid energy plans and your energy supplier has temporarily shut down energy delivery, your smart meter will turn red (no blinking). However, once the power is gone in your area, your smart meter will not be blinking – it will be completely shut down. 

Do Smart Meters Need Internet?

No, smart meters do not need the Internet to work. Your smart electricity meter uses a separate network to communicate with your home display (if you have one) and the energy supplier. This secure protocol connection does not use any form of Internet connection and will not try to connect itself to your home WiFi. The confusion comes because traditional meters had to be read manually, while smart meters can be read remotely, which implies there is a connection of sorts. 

How Do You Stop A Smart Meter From Transmitting?

Smart meters should never be stopped from transmitting. When your home uses electricity, electricity meters measure the electricity flow to your house. When the sun is high up in the sky and your solar panel system produces more electricity than you can consume, electricity meters track excess electricity that is being sent to the network (net metering). Having a smart meter that is always plugged in and fully operational also means you get more detailed insights into your energy use and more control over how much electricity you consume. 


A smart meter is the metering device of the future. Equipped with an in-home display, it can do a precise reading of your energy consumption and transmit this information to your local utility over radio waves. This kind of technology will ensure better and faster billing and a more reliable grid and will ensure that more renewable energy can be introduced into the grid in the future. 

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