Smart Meters

Existing Commercial

What are Smart Meters?

Figure 1 – Electric smart meter (Source: Rutgers University Facilities).

Figure 1 – Electric smart meter (Source: Rutgers University Facilities).

Smart meters or advanced meters, a component of the broader smart grid[1], use digital meters to record and transmit energy consumption and generation data, namely electricity, but also natural gas or water usage in intervals of an hour or less through a secure wireless network back to the utility and consumer at least daily.[2] As opposed to traditional analog or automated meter readers, smart meter technology includes remote reading, two-way communication, support of dynamic pricing[3], and remote disablement and enablement of supply.[4] Energy companies can use data from smart meters to better monitor and manage energy supply and demand, power outages and the integration of clean energy sources into the electric grid. Smart meters provide documentation for participation in utility-sponsored demand response programs, which incentivize consumers to interrupt or adjust energy use by reducing or shifting loads or storing energy during peak demand and periods of higher energy costs or enable utilities to remotely switch electricity services on or off based on the cost or availability of energy.[5] For example, consumption data from smart meters can signal a utility or consumer to remotely turn off air-conditioning units to avoid peak load issues or to run appliances during lower demand, lower-cost times of the day (see Smart Sensors and Controls).

Data collected from smart meters connected to a smart grid supports the advancement and adoption of distributed energy generation and energy storage technologies, such as wind and solar, and plug-in electric vehicles (see Energy Storage and Backup Power Generation).[6] By measuring both electricity generated as well as delivered, smart meters can help utilities better manage and control the storage and transmission of renewable power from distributed energy sources and micro-grids to end-users. Smart meter data can also provide consumers with information on when to use, store, or sell on-site renewable energy generation back to the grid and encourage smart electric vehicle charging during off-peak, low-cost hours (see Alternative Transportation).

How to Implement a Smart Metering System

Implementing a smart metering system begins with identifying the intended use and goals of the system as this determines the system’s requirements and features. Smart meter systems typically include installation of metering devices, communication networks, and data gathering and processing systems, as well as associated management and installation requirements.

Non-sub-metered systems bill tenants based on a percentage of the total usage for the entire building. A smart sub-metered system makes billing tenants for their actual usage possible.[7] In commercial buildings with multiple tenants or businesses, smart meters provide individual tenants and the utility company information on electricity, natural gas, and water usage, providing the opportunity to track progress on conservation strategies and participation in demand response programs and to identify opportunities to increase energy efficiency and cost savings.

Contact local electricity, natural gas, and water service providers for information on smart metering opportunities and demand response programs. In the absence of a utility run program, smart meters can be implemented by business owners to provide building operators with instant energy and water data for making informed energy choices or to help identify potential equipment issues and leaks, saving energy and money.


Orange & Rockland Smart Meter Program

The Orange & Rockland Electric Utility plans to install 400,000 smart meters to residential and commercial customers by 2020. The smart metering program aims to utilize the data from smart meters to boost grid reliability and cut the length of power outages by automatically notifying the utility when outages occur leading to faster restoration. Potential benefits to customers include data on energy use habits to promote behavior change or to signal customers to run building equipment and devices at off-peak hours or when cleaner, renewable energy sources such as solar and wind are available.


Smart meters provide benefits to both utility companies and consumers. Data gathered from smart meters provides utilities with information for conducting load forecasting, tracking renewable energy generation and storage, providing better monitoring of service quality, improving management of service outages, and initiating demand response programs.[8] Via demand response, smart meters support the shift of loads to off-peak times with more efficient generation from cleaner or renewable sources, reduce the need for additional generation from expensive standby power plants, and resulting air pollution, and prevent supply interruptions, grid congestion, and line losses.[9] Benefits to consumers include enhanced customer service, reduced theft due to the remote and real-time meter reading, and the establishment of time-based rates. Smart meters also inform consumers of their real-time energy usage, providing them with data to make informed energy use decisions and potentially change behavior. Smart metering water lines allow commercial facility managers to see consumption trends within the building and to target areas for improvement.


One study estimated that the average commercial customer would pay $7,000 to $10,000 for smart meter technology, which includes transmission and distribution upgrades and various customer costs (primarily the costs of the in-building technologies).[10] As an example, Rockland Electric predicts deployment costs of $16.5 million and estimates operational and management expenses over 20 years at $12 million. The utility projects to save $82 million over two decades in reduced labor and outage costs.[11]

For smart water meters, project costs range widely based on the number of customers, the specific metering, and communications technologies selected, the level of software integration, and the state of the metering system before smart metering system implementation.


Smart meters increase resiliency by supporting the smart grid, which aims to diversify and strengthen the electric grid through better energy management and the integration of cleaner energy sources such as wind and solar as well as electric vehicle charging into the electric grid. During storms or power outages, smart meters help accelerate service restoration by identifying problem areas and efficiently sending work crews, thereby reducing repair costs and total outage times and limiting business closures, health and safety hazards, food spoilage, and inconvenience from schedule disruptions. [12]

[1] Smart grids are electricity supply networks that use digital communications technology to detect and react to changes in energy supply and demand and manage the transport of electricity from generation sources to end users.

[2] U.S. Energy Information Administration (EIA). 2017. Frequently Asked Questions: Smart Meters. Updated December 7, 2017. (accessed Sept 5, 2018).

[3] Dynamic pricing includes time-of-use pricing, real-time pricing, variable peak pricing, critical peak pricing, and critical or peak time rebates.

[4] Connected Devices Alliance. 2018. “Intelligent Efficiency – A Case Study of Barriers and Solutions – Smart Homes.” March 2018.

[5] Connected Devices Alliance. 2018. “Intelligent Efficiency – A Case Study of Barriers and Solutions – Smart Homes.” March 2018.

[6] Smart Energy Consumer Collaborative. “Do smart meters help the environment?” (accessed Sept 6, 2018).

[7] National Conference of State Legislatures “Utility Submetering” (accessed May 1, 2018).

[8] 2006 FERC Report, 18 (accessed May 1, 2018).

[9] Connected Devices Alliance. 2018. “Intelligent Efficiency – A Case Study of Barriers and Solutions – Smart Homes.” March 2018.

[10] EPRI, “Estimating the Costs and Benefits of the Smart Grid.” (accessed May 1, 2018).

[11] Tom Johnson. 2017. NJ Spotlight. “Is New Jersey Finally Getting Smarter about Smart Meters?” (accessed Sept 7, 2018).

[12] DOE. “Smart Grid Investments Improve Grid Reliability, Resilience, and Storm Responses.” (accessed May 1, 2018)