By Gregory Quirk, Mouser Electronics
A smart meter is a way to record power consumption and communicate that information back directly to the power company for accurate usage and billing purposes. This helps in two ways. First, usage is vital to understand consumption patterns and be able to accommodate for high peak times, or power outages, and be able to prepare for them in a proactive manner. Second, it provides proper billing to consumers so that they can better monitor their consumption and take actions to cut back on power usage in an effort to reduce their bills.
While smart meters can also be used to measure natural gas or water consumption, the focus over the past few years has been to look at power consumption. In Europe it was estimated that 39 million smart meters were installed by the end of 2008, and installations have increased since then with 17.4 million units shipped in the first quarter of 2011.
Over the next few years there will be significant spending done to install smart meters. An estimated 45% of North American and European buildings will have smart meters installed by 2015, which generates a $19.5 billion opportunity for both meter and communication suppliers.
Some have raised concerns regarding smart meters, specifically around whether or not they can actually save consumers money as consumption prices typically increase due to the added cost of installing the meters and privacy issues as it can indicate when someone is away from their home for extended periods of time or indicate an individual's possessions and behaviors. There is also, in some areas, a question of health concerns as the meters generally use RF to send the information that has been collected.
Traditional power meters have been around for quite a while. Theoretically they work well enough to measure the consumption. However, there are a number of problems which smart metering is able to solve.
While most people are honest, there are some that tamper with their power meters to reduce their bills. It is still possible that people will try to bypass the security placed on smart meters, just as there are always people who try to circumvent any form of security that is applied, but smart meters will make it easier to identify these criminals.
There is a power meter installed at every residential home, and before smart metering, all of them had to be manually read. This resulted in a significant number of employees to periodically visit every home to check the meter. Given the sheer volume of homes, most monthly bills were estimated, potentially resulting in excessively high bills and frustration when the actual meter reading took place. Smart metering provides accurate billing information with near real time results so that every bill is for the correct amount.
One of the potential advantages of smart meters is time of use billing. This is a way to monitor how much power is consumed during on-peak, mid-peak and low-peak times with different pricing set for each period. For example, during the summer the highest energy prices occur over the afternoon due to greater air conditioning use, resulting in on-peak billing from 11AM until 5PM. During the winter there are typically two on-peak times, once in the morning from 7AM until 11AM and again at night from 5PM to 7PM, due to space heating and increased lighting and appliance use. For weekends and holidays power is always billed at off-peak. However, time of use billing, as well as the cost per kWh, is dependent on a specific area as there are no defined pricing models.
The idea is that home owners can take measures, such as not turning on the dishwasher or laundry machine, to reduce their consumption during on-peak times to reduce their bill. A test performed in Ontario showed that there was a 6.5% reduction in total energy used when consumers were provided with an accurate account of their consumption levels.
Another advantage for smart metering is the increased ability to accept excess power from residential generation. For example, if a person installs solar panels on their home and they generate more power than they consume, the excess power can be added back to the grid and accurately accounted for. This makes alternative energy sources more appealing for the average consumer, although it can take years, if not decades, to re-coup the expense for installing these systems.
One of the key areas around smart meters is how the information is transmitted to the power company. As with most electronic systems today, this is done wirelessly and is a critical element, as accuracy is paramount to the success of smart meters. Many factors must be taken into account as the meters are installed outside and must deal with environmental conditions. As well, outdoor topography is not always conducive to transmitting clean signals, which could be caused by impeding structures or even the terrain itself, such as a mountainous area.
These problems result in numerous and varied solutions to be put into place depending on the specific circumstances. Some examples include using the Internet and setting up Wi-Fi connections, while others depend on cellular networks, satellite, radio signals or power line communications. However, there is no single solution available today that addresses all of the issues presented.
There is little question that smart metering will continue to grow over the coming years. Part of the drive is the increased control that smart meters enable. The energy companies are able to implement time of use billing models. The consumers also benefit as their bills are more accurate each month resulting in fewer surprises. While not government mandated yet, there is strong interest throughout the world for deploying smart meters and a number of locations already have smart meters installed and operating. There is still some opposition in select areas, but these are limited. This will result in a significant spend over the next few years as new meters are created and installed. There is also an opportunity for companies to find flexible solutions to deal with the transmission issues presented. Finally, others will address areas of concerns, such as hackers gaining access to the information creating privacy concerns or adjustment of their bills.