Smart meters: how do they work?

Estimated reading time: 6 minutes, 12 seconds

If smart grids represent the digital revolution of energy, smart meters are the means by which this remarkable change is made possible, enabling real-time monitoring and two-way dialogue between nodes.

Smart meters are intelligent measurement devices that allow precise electricity, gas and water consumption data to be recorded. In the case of electricity, these devices create a communication network between the various nodes of the smart grid, monitoring incoming and outgoing energy flows for users with a renewable energy system, and optimising the system with two-way communication for users connected to a digital energy community with Regalgrid’s SNOCU unit.

The race to install smart meters is picking up pace across the world. According to the Power & Renewables report published by research company Wood Mackenzie, between now and 2025, utility companies will invest over $ 30 billion for installation of over 300 million smart meters. This will bring the number of installed devices to 1.3 billion.

But why are they so important? And above all: how do they work?


Smart metering

Smart metering as a principle allows energy efficiency strategies to be established. In fact, smart measuring and monitoring of consumption data is essential not only for service companies distributing energy and gas, but also for consumers, allowing them to be more aware and, consequently, more active in improving their own energy efficiency. As technology makes it increasingly smart and economic, this monitoring is also becoming accessible for end users.

These systems offer numerous advantages for all parties:

  • Reduction in management costs for readings and contracts, now controlled remotely
  • Increased frequency of readings
  • Grid monitoring and optimisation of maintenance in the case of losses
  • Possibility of free market competition
  • User awareness of consumption and wastage, provided by real-time metering of consumption and relative analysis using optimisation algorithms such as those offered by Regalgrid
  • Improved energy habits and increased energy savings
  • Reduced energy costs for the user.

How does a smart meter work?

Using a pre-defined protocolnew-generation smart meters record total energy consumption and the quantities consumed through the day for each day of the week. A two-way communication system sends data electronically using radio or PLC technology (transmission of information via the electricity network using waves sent through Power Line Communication). This allows data to reach the distribution company, which verifies it and sends it on to the seller within 24-30 hours.

To understand the true potential and benefits we need to take a quick look at the evolution of smart meters.


Smart meters in Europe

In Italy, the interest in smart meters began well before the race towards energy digitalisation that we are currently seeing. It was the first country in Europe to introduce these devices. In 2001, energy distribution companies began large-scale use of first-generation electronic smart meters on their own initiative, installing them for low-voltage end customers. From 2007, this became mandatory and the changeover was completed in 2011. In the meantime, Sweden was the only country to join in this innovative move, installing the new devices between 2003 and 2009.

The positive impact of first-generation smart meters was revolutionary at the time. Finally, it was possible to take actual hour-by-hour readings on a monthly basis (remote readings) grouped by time bands, in addition to performing remote management actions. These two aspects allowed a reduction in management costs.

The next countries to join the trend were Finland and Malta (2009), followed by SpainAustria and Poland (2011-2012). All the other European states only started to get involved following European Parliament Directive 2012/27/EU on energy efficiency. In the UK, installation began in 2015 and should be completed this year.

In Italy, the European directive was adopted by upgrading the features of meters, resulting in a new version, the second-generation (2G) meters.

These new meters allowed a series of goals to be achieved:

  • an increase in efficiency of readings and management
  • an increase in the level of consumption detail
  • availability of readings to sellers within 24 hours
  • the possibility for customers to consult data in real time
  • the option for notifications to be sent by the meter in the case of anomalies.

The benefits of a smart meter

These digital devices offer numerous advantages compared to the first-generation technology, including high-performance for long periods of time and integration of each household into a smart grid supporting the development of ever smarter cities.

Let’s take a detailed look at the benefits of 2G smart meters for our day-to-day lives.


  1. Lower bills based on actual consumption

    A high number of precise readings (one every two minutes) and sending of detailed readings to the operator (once every 15 minutes) means that bills are no longer based on estimates and balances but on real consumption figures.

  2. Flexible tariffs

    Again thanks to this real-time metering, sellers can calibrate tariffs using a maximum of six price bands. Ideally, it will be possible to have a personalised tariff based on your style of consumption.

  3. Grid stability

    Constant readings offer the chance to identify and manage consumption peaks and analyse consumption based on various categories, supporting greater grid stability.

  4. Swift meter servicing

    It will no longer be necessary to telephone for servicing and maintenance from a mobile technician, with operations instead being performed remotely by the distribution company.

  5. Precise management of the supply contract

    Very detailed metering and transmission of data allow correct management of contracts in the event of moving to a new house, transferring a contract to another name or resolving possible disputes regarding inaccurate charges.

  6. Daily monitoring of consumption

    2G smart meters allow daily monitoring of consumption but still do not support dialogue with the end user. Specifically, aggregation of data on a quarter-hourly basis does not permit detailed networked operations for systems that require far quicker reactivity. For this purpose, smart meters can be connected with third-party communication devices that use platforms allowing customers access via web or smartphone. One such device is Regalgrid’s SNOCU unit, that also interfaces with a certified meter, permitting real-time monitoring of consumption levels and offering the user the possibility to adapt their behaviour for greater energy savings.
    It is the real-time management and two-way communication capabilities of the SNOCU units that make them the perfect candidate to become the nodes of a digital, interconnected global energy grid. This will make it possible to increase consumption of energy from renewables sufficiently to meet the UN Agenda 2030 targets, demonstrating the product’s central role in establishing a sustainable energy future.


Smart meters

Therefore, 2G electronic meters are not the only smart meters available. We automatically think of these devices, given the global roll-out in progress, but measurement devices manufactured and certified by third parties for the end user are another option. These smart meters can be integrated directly with an existing meter or connected to it in the case of traditional meters, allowing monitoring and tracking of your consumption in real time and without information being filtered via the energy supplier. This awareness becomes even more detailed if you are also equipped with smart appliances or smart plugs.

This is clear if you are the owner of a photovoltaic system and even more so if you own a storage system. Your meter not only reads your consumption but also your production and storage data. A SNOCU unit with an appropriate license will give you access to all performance details for the various devices, allowing you to advance to the next level and actively control and programme them remotely according to your needs.

Until now, we have had to hand over awareness and responsibility for metering to third parties, but now is the time to take back control and embrace the responsible use of renewable energy.


Implementation of optimisation logics for individual self-consumption or, even better, collective self-consumption, requires prompt readings and data processing combined with extremely swift implementation of the resulting actions. This is why Regalgrid has developed and patented systems that are far quicker and go much further than the current capabilities of “2G” meters.

2G smart meters should also have guaranteed interoperability and direct access for end users, as set out by European Directive 2009/72/EC and Recommendation 2012/148/EU. In reality, this scenario is far from reality, with the clear exception of Regalgrid®’s SNOCU units that actually operate in real time.

Therefore, Regalgrid® not only offers all of this with a single device, but also implements optimisation logics of its proprietary digital platform. These logics require extremely high reading and response speeds in order to guide and manage the actions of inverters produced by various manufacturers and the yields from distributed storage systems, and to meet the energy requirements of standard consumers within a specific grouping or Energy Community.