Smart meters will replace mechanical electricity meters and offer more information on electricity usage.

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Smart meters will replace mechanical electricity meters and offer more information on electricity usage.

As technology continues to develop, our homes continue to get smarter and smarter. We can turn on lights by just walking into a room, change the temperature without getting off the couch and play our favorite music just by asking "Alexa" or "Siri". However, we still track all this energy consumption through mechanical meters that don't provide us any information on what, when or how we are using the electricity until now. Smart meters are beginning to roll out in areas of California, New York, Wisconsin and 7 other states and may be nationwide in the next 5 years. They will change the way you consume electricity and could change how providers charge for electricity.

Benefits of Smart Meters

If you own a home or a business, you have probably received an expensive electricity bill and have no idea why it was so high. You are left guessing who or what is using all that energy and running up the electricity bill. With smart meters, you will have next day access to energy consumption totals. No more waiting until the electricity bill comes to find out how much energy your home or business is consuming.

They can also instantly notify providers when electricity goes out so that there is less downtime. You can track the progress in real time and get notifications of the power outage through a dedicated app. This means less downtime for businesses and will allow home owner to better prepare for long term power outages.

A more accurate and detailed bill will allow you to better understand how you consume electricity and where you can cut-back or invest in a more energy-efficient solution. Also, a user-friendly app will make viewing and paying your bill easy and improve communication between provider and consumer.

Peak Time Pricing

While smart meters offer better communication and data on how you can cut-back on energy use, they also could allow providers to adjust the way they charge you. With mechanical meters, you are charged the same rate throughout the day no matter when or how you use energy. Smart meters, however, allow providers to charge different rates depending on the time of day. During peak energy use times (weekdays between 4pm-7pm) providers could charge you a higher cents/kWh. In an Ithaca, NY pilot program, the rate for electricity jumped to 18 cents/kWh during peak energy consumption times and back to 3 cents/kWh during non-peak times. After the pilot program, New York is planning to roll out 1.2 million smart meters statewide. Those that reject the new smart meters may be assessed penalties on their monthly electricity bill. It's all a part of the state's Energy Reforming Vision with the goal to alleviate the strain on the power grid during peak energy consumption times and spread out energy usage throughout the day.


Smart meters give the energy consumer a lot of information to make more informed decisions about how they use energy. However, peak time pricing could be a concern to many consumers who work a typical 9am-5pm job and who need to use energy when they return home. States like Maine, who have installed hundreds of thousand smart meters already, have not begun to charge for peak time usage because the state’s energy grid is not strained like in New York. Each state will enforce smart meters differently so make sure you follow your state’s progress with installing smart meters and potential to enforce time of day pricing.