What Is A Smart Meter?

Find out what is a smart meter, how they work and how they can potentially save you money with our comprehensive guide

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, updated on October 4th, 2023       

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Smart meter

Have you ever wondered exactly what is a smart meter? The introduction of smart electricity meters into Australia can be traced back to the early 2000’s. Between 2002 and 2006, the Council of Australian Governments (COAG) commissioned an Energy Market Review to look at the issue of smart electricity meters. Subsequently, COAG committed to a national mandated rollout of smart meters in 2007, and the process of transitioning to them in Australia has been ongoing ever since then. Find out all about smart meters, how they work, and how they can save you money right here with Savvy. 

What is a smart meter?

A smart meter is an advanced device that measures and records the consumption of electricity, gas, or water in a home or business in real time. It is designed to provide accurate data on energy usage, offering a detailed and precise understanding of consumption patterns.  

Unlike traditional meters, which have to be read manually by a meter-reader visiting the home, smart meters enable two-way communication between the electricity or gas retailer and the consumer. This means that meter readings can be sent to the supplier automatically on a regular basis. It also means both parties can access and exchange information remotely, eliminating the need for manual meter readings. 

How do smart meters work?

Let's delve into the details of how smart electricity meters work:  

  • Measurement and data collection:

Smart meters are equipped with digital sensors that measure the amount of electricity (or gas or water) consumed in homes or businesses. They provide more detailed data compared to traditional meters by capturing energy usage at frequent intervals, such as every 30 minutes or even every 5 minutes. This data is stored within the meter itself. 

  • Data storage and processing:

Smart meters have built-in memory and processing capabilities. They store the collected energy usage data, which can cover extended periods ranging from days to months. The meters can perform various calculations and analyses to generate insights about energy consumption patterns. 

  • Two-way communication:

One of the key features of smart meters is their ability to communicate with external systems. This is typically achieved through a communication module embedded in the meter. The meter uses different communication technologies to establish a two-way connection. Common methods include: 

– Wireless communication: Smart meters can utilise wireless communication protocols such as mobile networks (3G, 4G, or 5G), Wi-Fi, or dedicated radio frequency (RF) networks. These methods enable the meters to transmit energy usage data to the utility company and receive instructions or updates remotely. 

– Powerline communication: Some smart meters use powerline communication (PLC), which allows data transmission over existing electrical power lines. This method eliminates the need for separate communication infrastructure and utilises the power grid as a communication medium. 

– Local communication: Smart meters may also support local communication options such as Bluetooth, which enable direct communication with devices within the home or business. This local connectivity can facilitate the integration of in-home energy management systems or other smart devices. 

  • Data management and utility systems:

The energy usage data collected by smart meters is transmitted securely to utility companies or third-party service providers. These organisations manage the data, process it for billing purposes, analyse it for grid management, and provide consumers with access to their energy usage information. 

  • Internet connectivity and security:

Smart meters may or may not be directly connected to the internet. In some cases, they rely on dedicated communication networks established by utility companies. However, as the smart grid evolves, more meters are being equipped with internet connectivity, allowing direct transmission of data over secure connections. Security measures such as encryption and authentication protocols are implemented to protect the integrity and privacy of the data. 

By understanding how smart meters work, you can use your usage data to find a cheaper electricity plan with tariffs that help you take your consumption data into account.  

Are smart meters compulsory in Australia?

This will depend on where you live in Australia. In some states smart meters are compulsory, whilst in others they are not yet available. 

The decision to make smart meters compulsory was made jointly by the state and territory governments. The rules and timelines for the rollout differ depending on the state or territory where you live. 

In Victoria, for example, smart meters became mandatory for all homes and small businesses from 2007 onwards. The rollout started in 2008 and was completed in 2013, ensuring that most places in the state have advanced metering technology. 

In other parts of Australia, like New South Wales, Queensland, South Australia, and the Australian Capital Territory, smart meters are not compulsory but are being rolled out. However, there have been voluntary programs to encourage the adoption of smart meters. In the NT and WA, smart meters are available in some areas, but are not available in other areas. 

What are the advantages of smart meters?

There are several advantages of smart meters for the consumer. They include: 

  1. Access to more services: Smart meters open up a wider range of services for you, including options like battery storage. This means you can explore additional ways to manage your energy and make the most of innovative solutions.
  2. Detailed energy information: Smart meters provide you with detailed information about your energy usage on a regular basis. This valuable data helps you understand how you use electricity and gives you the power to adjust your habits or find the best electricity plan that suits your needs.
  3. Improved product and service offerings: With smart meters, electricity retailers can offer you better and more innovative products and services. You might benefit from energy management apps that help you monitor and control your usage, as well as online access to personalized information about your electricity consumption.
  4. Faster outage detection and reliable supply: Smart meters enable electricity distributors to quickly detect outages and monitor the quality of your electricity supply. This helps minimize the number and duration of power outages, ensuring a more reliable electricity service for you.

Can a smart meter help me save money on my energy bills?

Yes, a smart meter can help you save money on your energy plan. Here's how: 

  • Real-time usage data: Smart meters provide you with real-time information about your energy consumption. You can see exactly how much electricity you are using at any given moment. This awareness helps you make more informed decisions about your energy usage and can help you identify areas where you can reduce consumption.
  • Time-of-use tariffs: Smart meters allow you to choose a plan that includes a time-of-use tariff. This means on your plan the cost of electricity varies based on the time of day you use it. For example, there are peak cost periods and off-peak cost electricity times. Using this information, you can adjust your energy usage to take advantage of off-peak hours, when electricity rates are lower. For example, you can run high-energy appliances like washing machines or dishwashers during cheaper periods, saving you money.
  • Energy efficiency insights: By analysing the detailed energy data provided by a smart meter, you can gain valuable insights into your energy consumption patterns. You can identify which appliances or behaviours are consuming the most energy and make adjustments to optimise efficiency.
  • Personalised energy-saving strategies: Smart meters enable you to track your energy usage in real time. This data empowers you to set goals and track your progress in reducing energy consumption. You can implement personalised energy-saving strategies based on your specific usage patterns and lifestyle.
  • Informed decision-making: With access to detailed energy usage information, you can make more informed decisions when it comes to choosing energy-efficient appliances and making home improvements.

Savvy can help you compare gas, electricity and solar electricity plans to help you find a plan which fits in with your energy consumption. Use our free comparison service to help you compare energy plans and potentially save money!  

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Any advice presented above is general in nature and doesn’t consider your personal or business objectives, needs or finances. It’s always important to consider whether advice is suitable for you before purchasing an energy plan. For further information on the variety of energy plans compared by Econnex, or how their business works, you can visit their website.