What is a Smart Meter?
A smart meter is a device that records data, including the consumption of utilities such as natural gas, water, and electricity. What differentiates smart meters from traditional meters is that they provide two-way communication between the meter onsite and the utility’s central controls. Meters installed in homes give regular updates to both the consumer and provider of gas, water, or electricity consumption. Smart meters allow utilities to report consumption in real-time and might be connected wirelessly or via an analog method, such as plain old telephone system (POTS).
3 Reasons to Install Smart Meters
There are three critical motivators for utilities to install smart meters. The first is that real-time consumption data provides useful information about demand and response times. They can use this information to incentivize customers to change their usage patterns by designing dynamic pricing models.
Secondly, employees no longer need to travel onsite to homes, businesses, or other facilities to read a meter. The new, automated meter reading processes allows utilities to divert their workforce to other projects.
Finally, smart meters provide greater visibility into their services, helping utilities improve and plan for upgrades and new offerings. Utilities can feed consumption into smart city programs and plans to serve their communities better.
Consumers like the idea of smart meters because they can use real-time information to make informed decisions about their energy and water use. For example, when companies deploy smart meters in homes, they usually come with an in-home display (IHD). The IHD allows residents to know how much water and energy they have used and how much it costs them. They can use this knowledge to reduce their consumption for environmental or economic benefits. The technology also allows utilities to offer new payment flexibility, such as Baltimore Gas & Electric‘s pay-as-you-go plans.
Impact of Smart Meters
The history of smart meters can be traced back to the 1970s in the U.S. Telephony advances like caller ID inspired these remote meter readers (RMRs) that used early machine-to-machine technology. As RMR benefits caught on, utilities leveraged the existing analog landline network (publicly switched telephone network or PSTN). Through the early 2000s, this was the most reliable connection as most U.S. residential, commercial, and industrial customers were covered by telephony infrastructure. By the mid-2000s, cellular and broadband coverage advances allowed utilities to begin to rely upon these methods for connections.
By 2006, companies across the U.S. began adopting smart meters as we think of them today, relying upon analog, wireless, and Wi-Fi networks. According to the Edison Foundation, an energy utility-funded think tank, by 2018, utilities had installed nearly 88 million electricity smart meters, covering almost 70% of U.S. households. California, Florida, and Texas utilities lead the country in the adoption of smart meters.
An Important Consideration for Future Deployments
Smart meters are due for another evolution. One of the foundations of the link between meter and provider, the analog PSTN, is now losing its reliability.
Telecom providers across the board have acknowledged their PSTN copper wires are costly to maintain, and knowledge of the infrastructure is diminishing. They’ve been encouraging customers to move to voice over internet protocol (VoIP) and actively working to discontinue their analog landlines for several years. Most experts expect the majority of telecom providers to have abandoned PSTN entirely by 2025. Utilities should migrate their existing smart meters and deploy any future meters on wireless networks.
While there are always challenges when undergoing projects, the migration to wireless opens the door to opportunities only available on a digital network. For more information on trends in smart meters and strategies for migrating from PSTN to wireless, check out our white paper.