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Updated Dec 20, 2023

Should Your Business Use Smart Metering?

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Neil Cumins, Business Ownership Insider and Senior Analyst

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The adoption of smart meters has skyrocketed in recent years as households and businesses increasingly attempt to rein in their energy usage. After California-based Pacific Gas & Electric became the first American energy company to roll out smart meters in 2006, other energy companies have followed suit. Once you learn what a smart meter is and how it can help save you or your business money, you might be surprised this technology hasn’t been more widely adopted. 

What is a smart meter, and how does it work?

A smart meter tracks the utility energy consumption that occurs on the system or outlet it is attached to. For example, a smart meter connected to a natural gas line tracks the number of therms consumed. The “smart” feature of the meter lets it control the flow of the resource being used, such as natural gas, water or electricity. The meter can also be controlled remotely.

The most recent data from the U.S. Energy Information Administration suggests almost 12 million commercial premises across America have a form of advanced metering infrastructure, and more than 90 million residential homes are similarly equipped. Nearly two-thirds of electricity meters now have smart capabilities, according to a Guidehouse Insights report.

Did You Know?Did you know

Smart meters have been around since the mid-1970s – they were developed from the phone line identification system known as caller ID.

Are there any differences between business and domestic smart meters?

Smart meters aren’t smart enough to differentiate where they are or which type of client they’re serving. As a basic method of tracking energy use, a meter would work just as well in an office as it would in a private home. They don’t require Wi-Fi, since they distribute data and receive updates through a secure network run by the utility provider. 

In both corporate and domestic settings, your ability to install or reject a smart meter depends on who owns the facility and what system is being controlled. In the case of municipal devices, such as natural gas outlets or electricity connections, many jurisdictions have passed laws and regulations that necessitate smart meter installations and usage. In other jurisdictions, their use is up to the property owner. If a resident is renting a home or a business owner is leasing an office, they may not have a choice in whether or not a smart meter is installed.

In the U.K. and many other countries, energy meters are regulated at the government level. In America, each state has its own utility providers who retain control over distribution and adoption, so your ability to access smart metering depends on where in the country you live. It’s also worth noting that some skepticism exists towards meters, alongside concerns about software vulnerabilities and electrical fire risks. See more about the risks associated with smart meters below.

How much do smart meters cost?

If you live in a state where smart meters are commonplace and work directly with an energy company for your power utility, you’ll have to pay a fair amount to obtain a smart meter if it’s not bundled in with your contract. The total cost of acquiring and installing a single meter is typically around $200, but its use should save you significantly more than that over the course of its lifespan – usually 15 years or so. Businesses with multiple premises may be able to negotiate discounts with their meter providers. Again, this depends on which state you’re in and which utility company you’re negotiating with.

How can smart metering help businesses?

The greatest benefit of smart metering is the granular insights it offers into your business’s energy consumption and other utility usage. Most smart meters tie directly into an interface that gives you an exact readout of your usage, breaking it down by the time of day and day of the week or month. Having this information at your fingertips facilitates better decisions around your company’s consumption and generates up-to-date records of your resource usage. Some interfaces correlate usage with a monetary measurement, like a rating of watts per hour, allowing you to see how much electricity is costing you by the minute. [Another way to save money is to upgrade your business technology for greater productivity.]

Neil Maldeis, lead engineer with HVAC system maker Trane, described a project with an Illinois school district to set up an interactive smart metering interface students can use to monitor their own school’s energy consumption. Based on the study’s results, the district implemented changes that paid off in more ways than one. 

“The upgrades implemented by the district helped increase energy efficiency, provide comfort to enhance learning conditions and improve environmental literacy,” Maldeis said. “As a result, energy and maintenance costs have been reduced, nearly 20 hours of weekly staff labor have been eliminated and the district has qualified for nearly $64,000 in rebates. District officials expect to save $500,000 over the course of the project, which was one of their strategic plan objectives.”

Key TakeawayKey takeaway

When you have a better idea of how much electricity your business is consuming at any given time, it can inspire you to launch initiatives that reduce your company’s energy use – and costs.

What are the risks of smart meters?

Because smart meters operate on connected networks, they present some cybersecurity risks. Theoretically, anyone who knows how to hack the device could take control of it. Several hackers have proved this is possible whenever there is an open public outlet, such as an IoT device using the internet. Closed signal channels are much harder to get into without unauthorized access, but it’s still possible. Fortunately, these quick cybersecurity tips can shore up your business’s defenses.

There are also concerns digital meters may allow surges and overvoltage to flow into buildings, with reports of house fires across America and overseas. However, case numbers remain very low, despite being extensively reported on. Where fires have occurred, the devices responsible may have been wrongly installed, though there are some fears meters may instigate fires in other devices on the same electrical circuits due to power surges.  

Businesses or consumers who would prefer to avoid smart meters might be able to install usage apps, depending on their supplier. Manually monitoring a meter is an even more low-tech way of tracking usage. However, this provides less comprehensive data than a smart meter would, and regular access could be impractical depending on where in a building the utility meters are located. 

What is the future of smart metering?

Smart metering is improving thanks to evolving connectivity innovations, especially IoT. With meters tied to the mechanisms that control the resources they’re measuring, we can turn some of our decisions over to automation backed by machine learning. For example, a smart meter tied to a thermostat could help the thermostat automatically determine times to change the heat based on fluctuating energy costs. Smart meters can also be applied to numerous devices and machinery, allowing businesses to manage their power usage per machine.

Another potential application is for devices that use up consumable resources and need to be refilled. Smart meters that detect that a resource is about to run out can prompt an IoT device to automatically order a refill.

For utility companies, greater numbers of smart meters connected to their infrastructure provide ever more data on customer usage – in turn helping them run power grids more efficiently. They can use the data to detect live irregularities in sections and go onsite to make preventive repairs before an outage occurs.

Why is it smart thinking to use smart monitoring?

At a time when global events have brought energy supply and usage into headlines on an almost daily basis, companies and consumers alike should closely monitor their energy usage. A smart meter provides an inexpensive window into your consumption of utilities like water, gas and electricity. By revealing inefficiencies in usage, it encourages people to think smarter about consumption. Not only can this be surprisingly rewarding, but it also saves you money. As such, it’s hard to think of an irrefutable reason why businesses and homes shouldn’t have a smart meter installed.

Business News Daily editorial staff contributed to the writing and reporting in this article. Source interviews were conducted for a previous version of this article. 

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Neil Cumins, Business Ownership Insider and Senior Analyst
Neil Cumins is an award-winning small business owner who has run a limited company for nearly two decades. Through his personal and professional experiences, he is well-versed in a range of B2B and B2C topics, from invoicing to advertising to the use of artificial intelligence. Prior to starting his own business, Cumins worked as a marketing executive. With deep insights into the ever-changing technology landscape, Cumins is particularly skilled at evaluating business software and guiding fellow entrepreneurs to the tools and strategies that will equip them for entrepreneurial success. Over the years, he has worked with some of the world’s biggest hardware and software manufacturers, as well as countless SaaS brands. Today, he also spends his time consulting on compensation and other business matters.
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