What is a Smart Meter Reader? Explore Types, Working, Pros, Cons, and Cost

A smart meter reader, or simply a smart meter or AMI meter, is an advanced metering device that automatically records how much electricity you use and sends that data to your power distribution company (discom) in near real time. Unlike traditional energy meters that need manual readings once a month, smart meters use two-way communication: 

• They share your electricity usage with the utility company (discom)
• They let you see your consumption patterns almost instantly

These meters send usage information to the discoms every 1 hour or less. So, you don’t have to wait until the end of the month to find out how much power you’ve consumed. Here’s what this means. 

• For discoms: This means more accurate billing, faster detection of power theft, and better monitoring of grid performance. 
• For consumers: It means fewer billing disputes, easier tracking of daily electricity use, and the chance to shift heavy-load activities away from peak hours to save money and reduce stress on the grid.

Smart meters also play a key role in supporting the adoption of solar renewable energy. For example, if you plan to install an on-grid rooftop solar panel system for homes, your smart meter will manage net metering by recording the power you consume and the surplus energy you send back to the grid. You won’t separately need a bidirectional net meter because your digital electricity meter will work like one. 

This way, you can cut your electricity bills by 90% or even offset them entirely by using the solar electricity generated by your rooftop on-grid solar system. The Indian government has also launched the Smart Meter National Programme (SMNP) that aims to replace 25 crore normal meters in India with smart electricity meters.

In this blog, you’ll learn what a smart meter is, how it works, its types, benefits, drawbacks, and cost. You’ll also learn why installing on-grid rooftop solar for housing societies, homes, and commercial buildings is a great idea when replacing your normal meter with a smart meter reader in India.

TL;DR Summary Box: What Exactly Does a Smart Meter Do?

A smart meter reader automatically measures and transmits electricity usage data to utility companies. It eliminates the need for manual meter readings that are mandatory with normal energy meters. These smart energy meters use multiple communication technologies, including Wi-Fi routers, cellular mobile data, or power line communication, to ensure reliable data transmission between meters and utility companies.

Here are the main topics covered in this blog in detail:

What is a Smart Meter Reader?

A smart meter reader is a digital electric meter that automatically records electricity consumption at homes, housing societies, and offices, and uses wireless networks to send the recorded data to the utility company every 1 hour or less. Unlike traditional energy meters, which require a meter reader to visit your property monthly for manual consumption checks, smart meters automate the entire process. 

They eliminate the need for physical visits by sending consumption data electronically. These intelligent devices function like small computers, measuring, storing, and communicating electricity usage information in near real-time.

Since everything here is automated, these meters offer multiple benefits to consumers and discoms. 

• Discoms benefit as power theft can be easily detected, which was unlikely in manual traditional meters.
• Consumers can’t be overcharged because smart meters record the actual electricity usage in near real time, taking human error and guessing out of the equation.  

How Does a Smart Energy Meter Work?

Smart energy meters measure, record, process, and communicate the electricity consumption data to discoms in real time. 

The device records energy consumed using electronic sensors, processes this information through built-in microprocessors, and transmits the data to utility companies through various communication networks. This automated process eliminates human error completely.

Here are the main components of smart meter readers and how they work to record and send electricity consumption data:

• Measurement processor: It records the electricity units consumed by the user in real time. 
• Communication module: It transmits the consumption data via cellular, RF, or power line communication.
• Display unit: It shows real-time power consumption and billing information.
• Memory storage: It stores historical usage data and system parameters.
• Security encryption: It protects data during transmission and prevents meter tampering.
• Power supply unit: It ensures continuous operation even during power fluctuations.

Now that you know the core components that make it possible to record and transmit the electricity consumption data, let’s learn how this happens in simple steps:

• Step 1: Electronic sensors in the digital electric meter monitor and measure energy consumed: The electronic sensors continuously monitor electrical current and voltage flowing through your home’s main electrical connection. These sensors are far more accurate than traditional meters and can detect even small changes in power consumption.
• Step 2: The microprocessors in the AMI meter process the data: The built-in microprocessors calculate actual energy consumption in kWh by processing voltage and current measurements. They also record additional information, such as power factor, peak demand, and the times when high-power appliances consumed the most electricity.
• Step 3: Recorded data is then stored: All consumption data is stored in the smart energy meter’s memory. The meter can store up to 35-45 days of detailed usage history. This ensures no data is lost even if communication is temporarily interrupted.
• Step 4: Stored data is transmitted to the utility company in near real-time: The communication module sends consumption data to the utility company in every 1 hour or less through the selected communication network (cellular, RF, or power line communication).
• Step 5: The discom receives the power consumption data: The utility company’s data management system receives and processes the consumption information. It helps update customer accounts in real-time. This eliminates the need for estimated billing and allows immediate detection of power outages or unusual usage patterns.
• Step 6: Consumers can access the details remotely from anywhere: Processed data becomes available to consumers through mobile apps or web portals. It provides real-time visibility into electricity consumption and costs. You can use the available information to identify appliances that consume the most power during peak demand hours and shift their usage to less busy hours, thereby reducing stress on the grid.

What is the Difference Between a Smart Energy Meter and a Normal Energy Meter?

The main difference between smart meter readers and normal energy meters is the way in which they communicate and manage electricity consumption data. While traditional energy meters require manual reading and provide very limited information, smart meters automatically measure, record, and transmit the electricity consumption data to the discom. 

Furthermore, smart energy meters, unlike normal energy meters, offer a two-way communication between discoms and consumers, making them truly bidirectional and very useful for grid-connected solar energy systems. 

Here’s a tabulated snapshot of the key differences between the two types:

What are the Types of Smart Meter Readers?

The main types of smart meter readers include single-phase smart meters for residential use, three-phase smart meters for commercial applications, prepaid meters for budget control, and different communication variants. 

Let’s check out all the types of smart electricity meters in detail:

• Single-phase smart meters: These are suitable for residential consumers with electrical loads up to 10-20 kW. They are ideal for small-to-medium Indian homes, small shops, and apartments with household appliances and lighting systems.
• Three-phase smart meters: They are suitable for commercial, industrial, and high-consumption residential areas where loads exceed 20 kW. These meters handle heavy machinery, large commercial establishments, and industrial facilities.
• Prepaid smart meters: These meters allow consumers to purchase electricity credits in advance. They automatically disconnect power when the balance runs out. They’re excellent for budget control and are popular for rental properties. 
• GSM smart meters: They use cellular networks (2G/3G/4G) for data transmission and provide reliable communication over an unlimited range. These meters work well in areas with good mobile network coverage and offer real-time data transmission capabilities.
• RF mesh smart meters: These meters communicate through radio frequency mesh networks with a 1-2 km range between the meters and data collectors. 
• PLC smart meters: These digital electric meters use existing power lines for data communication. They’re quite cost-effective for utility companies. However, their reliability depends on power line quality and electrical noise.

What is the Smart Meter National Programme?

The Smart Meter National Programme (SMNP) is an initiative by the Indian government to replace all the old electricity meters in the country with new smart meters. The target is to install 25 crore smart meters across the entire country.

Here are the main objectives of the Smart Meter National Programme:

• For utility companies: Electricity companies can read consumer’s power usage automatically, send accurate bills on time, and detect problems like power theft or overloading immediately. 

• For consumers: Having smart meters means no more wrong bills, no need to wait for someone to come and note the meter reading, and the ability to see how much electricity is being used in near real time.

This programme is also connected with the government’s plan to make electricity supply more reliable and to encourage people to save energy. Since smart meters make it easier to use rooftop solar and manage electricity efficiently, they are seen as an important step toward a smarter grid in India.

Please note: The Smart Meter National Programme uses a TOTEX model (CAPEX + OPEX) under the DBFOOT approach. Here, private service providers (AMISPs) design, build, finance, own, and operate smart meters. Later, they transfer rights to the discoms. Instead of paying upfront, discoms make regular payments that are tied to a Service Level Agreement (SLA). It means AMISPs get paid only if the meters and services work properly. This way, the provider is responsible for the entire project lifecycle and ensures reliable performance.

How Much Does a Smart Meter Cost in India? 

Smart meter cost in India varies from city to city. For instance, the smart meter price in Karnataka for a single meter is Rs. 4,998. On the contrary, in Sikkim, the highest recorded price for a single smart meter has been Rs. 14,679. 

Although AMI fees for network and tech are covered by discoms in many cities, consumers still have to pay a significant portion of the smart meter price. However, the government makes it clear that the entire amount doesn’t have to be paid all at once to reduce financial burden on consumers.

What are the Benefits of a Smart Energy Meter?

Smart energy meters make life easier for both consumers and utility companies. For consumers, these digital electric meters provide a clear picture of how much electricity is being used, help avoid wrong bills, and even play a role in reducing power cuts. For utility companies, this technology improves efficiency, reduces losses, and detects meter tampering and power theft. 

Let’s check out all the benefits/advantages of smart energy meters in detail:

• Accurate billing: Since readings are sent automatically, there’s no chance of human error in billing. Consumers only pay for what they actually use.
• Real-time energy monitoring and tracking: You can see your daily or even hourly electricity usage. It can help you understand which appliances are consuming the most power.
• No manual meter reading: You don’t have to wait for someone to come to your house every month to take the reading. Everything happens remotely and automatically with utmost accuracy.
• Fewer power cuts: By helping discoms manage demand better, smart energy meters reduce the chances of overloading and sudden power cuts.
• Detects electricity theft: Smart meter readers make it easier for discoms to catch power theft, which reduces overall losses.
• Supports solar and renewables: If you have rooftop solar at your home, you won’t need a bidirectional meter if you already have a smart meter. Your smart meter will keep track of both the electricity you use and the extra units you send back to the grid.
• Cost savings for consumers: By checking your real-time electricity usage, you can shift heavy appliances like washing machines or ACs to non-peak hours and lower your electricity bills.
• Better customer service: With fewer billing disputes and faster problem detection, both customers and discoms save time and effort.
• Faster outage detection: Smart meters send automatic alerts to utility companies about power outages. Hence, power is restored more swiftly than possible with normal energy meters, where complaints have to be filed manually. 
• Remote services: Smart electricity meters allow online bill payments, service requests, and account management without requiring physical visits or phone calls to utility offices.
• Energy efficiency: These meters can help you identify energy-wasting appliances and optimize usage patterns through detailed consumption analytics and historical data.
• Prepaid options: Smart meters also offer prepaid electricity plans for better budget control and expense management. 

What are the Drawbacks of a Smart Meter?

While smart meters offer many advantages, they do have a higher installation cost, which consumers have to bear. Besides the installation cost, which is a significant challenge, these meters also have a learning curve and a dependence on network connectivity. 

Let’s check out all the current challenges that AMI meters face: 

• High installation cost: Smart meters are more expensive than regular meters. Although the smart meter price can be paid slowly over time, it remains a financial burden for consumers.
• Data privacy concerns: Since smart meters send detailed usage data, some people worry about how this information is stored and who can access it.
• Dependence on network connectivity: If the communication network is weak or goes down, the meter may fail to send data properly.
• Learning curve for consumers: Not everyone finds it easy to understand or use the new digital interface and apps linked to smart meters.
• Maintenance and reliability issues: Like any digital device, smart meters can face technical glitches or need repairs. This can add to long-term costs.
• Resistance to adoption: Some households are hesitant to switch due to a lack of awareness, fear of higher bills, mistrust of new technology, and high upfront investment.

Should You Install Rooftop On-Grid Solar While Upgrading to AMI Meters?

It’s the best decision to install on-grid rooftop solar systems if you’re currently upgrading to smart meters or have them at your property already. Since these meters already offer two-way communication, they won’t have to be replaced with any other meter for the solar system to work. 

In general, on-grid solar systems have many benefits over off-grid solar systems.

• Homeowners and housing societies receive a subsidy under the PM Surya Ghar Muft Bijli Yojana: This subsidy is offered for installing on-grid rooftop solar systems only. If you install off-grid solar systems that consist of a lithium battery bank or ground-mounted solar systems, you won’t be able to take advantage of the subsidy scheme.
• You won’t have to worry about rising electricity tariffs: The government increases electricity rates in India by 3-6% annually. If you have an on-grid rooftop solar system, you won’t have to worry about inflating tariffs as your solar system will produce free solar electricity throughout its life, which is at least 25 years with proper maintenance. 
• Your electricity bills will reduce by 90% or more: An appropriately-sized solar system will take care of all your energy requirements, reducing the need for grid electricity. Many consumers also report getting zero bills after going solar.
• The initial investment cost will break even in 3-5 years: Since on-grid solar systems do not require lithium batteries (which are expensive to install and maintain), the upfront investment cost breaks even in 3-5 years. After that, you will enjoy free electricity for decades. 

Initial Investment Cost vs Solar Savings From On-Grid Solar Systems in 25 Years

Here’s a simple tabulated comparison between the cost of installing a rooftop on-grid solar system in a city like Nagpur and the money that system ends up saving in 25 years of its life:

*Please note: The above-mentioned solar plate price is indicative as of 26th August 2025 for the SolarSquare Blue 6ft variant. The final cost of installing an on-grid rooftop solar panel system at home depends on your DISCOM charges, product variant opted for, panel type, inverter type, mounting structure height, type of after-sales service, savings guarantee, roof height, etc. Prices are subject to change. Additionally, while calculating savings, we have considered the annual tariff escalation at 3% and the annual degradation at 1%. The actual final savings from solar panel installation depend on the types of solar panels you’ve installed and their efficiency, intensity of sunlight your rooftop receives, orientation of the panels and tilt angle, the pollution level and weather conditions in your city, the temperature, shadow on the roof, impact of dirt/dust, and how well you maintain your panels after installation.

Use SolarSquare’s free solar rooftop calculator to calculate solar savings from an on-grid rooftop solar system in your city. For any further information, book a free solar consultation call with our experts.

Conclusion 

Smart meters are advanced energy monitoring devices that offer improved billing accuracy, real-time consumption monitoring, and enhanced grid management capabilities. These meters are hard to tamper with, and they also ensure that consumers are being charged only for the exact electricity units they’re consuming; nothing less and nothing more.

However, the high upfront installation cost is the biggest challenge the government currently faces in making smart meters widely popular amongst homeowners. Nevertheless, these digital electric meters are set to replace traditional energy meters in India in the near future.

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FAQs

Q1. Is a smart meter compulsory in India?

Ans. The government has planned to replace all old electricity meters with smart meters under the Smart Meter National Programme. In many states, it is already becoming compulsory.

Q2. What is the objective behind smart metering?

Ans. The main objective of AMI (Advanced Metering Infrastructure) is to make electricity management smarter. It enables the utility company to read meters remotely without errors, quickly identify network issues, analyze when and how people use electricity, and conduct proper energy audits to reduce losses. Instead of cutting power completely during high demand, AMI also makes it possible to reduce only part of the load by controlling certain appliances or areas. Thus, the impact on consumers is much smaller.

Q3. How much electricity does a smart meter use?

Ans. A smart meter uses such a tiny amount of power and costs practically nothing on your electricity bill.

Q4. Can I monitor my smart meter on my phone?

Ans. Yes, most smart meters come with apps or online portals where you can check your daily electricity use right from your phone.

Q5. Do smart meters need Wi-Fi?

Ans. No, they don’t use your home Wi-Fi. Smart meters connect using their own network, like cellular, power-line communication (PLC), or wireless mesh systems. They send data directly to the utility using their own communication module, not through your home internet.