Not So Smart Meters

Why is in News?

  • The Union Finance Minister, urged states and union territories to replace all conventional electricity meters with prepaid smart meters over the Next Three Years.

What is a Smart Meter?

  • A smart meter is a digital meter that replaces old analog meters, which are used in homes to record electrical usage.
  • These digital meters can transmit energy consumption information to the utility (as it is connected to the internet) in frequent intervals, and can monitor consumption more precisely, thereby enabling more informed energy choices.

How Smart Meters Help?

  • For consumers, smart meters help in monitoring and managing electricity consumption and save money. It can be like your mobile pre-paid connection. You can buy electricity for a fixed amount, and use it. After finishing, you can top-up, just like a mobile recharge.
  • It can Reduce Billing Errors.
  • Smart meters help power distribution companies (discom) to conduct power-quality analysis in near-real time, taking into consideration factors such as maximum demand, voltage fluctuation, outage detection etc.
  • It helps discoms reduce peak power purchase cost, thereby improve business efficiency. This in turn reduces their debt, thereby helping the economy.
  • Smart meters also aids in the recovery of receivables, which has caused a huge stress on the system. Estimates say that Rs 1 lakh crore worth power was unbilled last year. So, it can help discoms plug leakages in the whole chain.

Limitations of Smart Meters:

  • Prepaid meters address only a small part of the problem of discom finances – non-payment of billed amounts. Discom losses have two additional components: Line losses in the distribution network, and theft outside the meters, neither of which will be helped by smart meters.
  • Smart meters will require access to network and support architecture to transmit and store data.There is no clarity on the network costs, who will bear it, and the impact on the electricity bills of the poor.
  • Prepaid meters invert the order between consumption and payment, but are unlikely to address the fundamental problem: Weak accountability between discoms and consumers.
  • Prepayment in the current tariff structure does not eliminate the discoms’ incentive to prioritise their affluent consumers over the poor.


  • The Centre’s push for smart meters may be an important ingredient for transitioning to a 21st century electricity-system.
  • However, let us not pretend it is the silver bullet to solve the long-standing problems of discom finance and losses, and accountability and governance in the Indian electricity system.

Source: The Indian Express

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