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How do smart meters work and can they save you money?

See what smart meters can and can't do for you and how you can use them to your advantage.

smart meter on a wall
Last updated: 23 January 2023


Checked for accuracy by our qualified fact-checkers and verifiers. Find out more about fact-checking at CHOICE.

Need to know

  • A smart meter is a device that measures your electricity use digitally and sends data back to your electricity provider
  • Smart meters measure consumption more accurately than other meters, so having one can help you switch to a cheaper deal
  • They can also help you choose and use rooftop solar, but you might need additional devices if you want to add a battery to your set-up

Having a technician come to your home to read your electricity meter is increasingly becoming a thing of the past, thanks to the rollout of smart meters.

Smart (or advanced) meters measure your electricity use generally every 30 minutes across a day, and cut out the need for a meter reader by sending data directly to your provider.

This means your retailer can bill you for your exact use (no more estimates), and can pass that data back to you, equipping you with the knowledge to find the best energy deal.

And smart meters are set to become more common – uptake is already around 30% outside of Victoria (where smart meters are mandatory), and the Australian Energy Market Commission (AEMC) has set a target of having 100% smart meter uptake in New South Wales, Queensland, the ACT, Victoria, South Australia and Tasmania by 2030.

What is a smart meter?

A smart meter is a digital electricity meter that records a home's energy use in at least 30-minute intervals and then sends that data to the relevant retailer, usually once a day.

Residents can also access this information, but it's not displayed on the meter itself, so reading it takes a few extra steps. (See below to find out how to read a smart meter).

Smart meters are the successors to the traditional accumulation meters, which only measure the total amount of electricity a property has consumed and have to be manually read by a technician every three to six months.

Interval meters are a step up from those, and record electricity use digitally every 30 minutes. But they can't send that data back to a provider, so it still needs to be manually downloaded and read.

Smart meters in your state or territory

If you live in Victoria, your home should already have a smart meter, as they've been compulsory for residences in the state since 2006.

If you live in New South Wales, Queensland, the ACT or South Australia, it's unlikely that you already have a smart meter (only around 20–30% of homes have them in these jurisdictions). Smart meters are slightly more common in Tasmania. 

But in any case, if you don't have a smart meter, you may be getting one soon.

By order of the Australian Energy Regulator (AER), all new and replacement meters in these states and territories have to be smart devices, so if you're building a new house or replacing a faulty meter at an existing property, a retailer has to provide you with a smart meter.

If you don't have a smart meter, you may be getting one soon

Western Australia and the Northern Territory are outside the AER's jurisdiction, but residents here will still be getting a smart meter as local authorities get their own rollouts underway.

Around 27% of the NT's meters are already smart, so if you live here, you may have one already. In any case, the territory's Power and Water Corporation is opting for smart options for all new and replacement meters.

In WA, the main distributor Western Power has a similar program. Around 42% of households on the state's main southern grid already have a smart meter and the state government plans to have 100% coverage by 2027.

In most jurisdictions, there are loopholes allowing you to avoid getting a smart meter if you don't want one, but these are limited. See below for more information on what you can do if you don't want a smart meter.

person checking electricity usage on in-home display

An in-home display hooked up to your smart meter lets you keep an eye on your usage.

Benefits of smart meters

There are several benefits to having a smart meter. Smart meters:

  • reveal more detailed energy consumption and solar panel export data, which can help you find ways to be more energy efficient
  • let your provider connect or disconnect your power remotely, meaning fewer delays when you move or swap electricity retailers
  • allow your energy distributor to better monitor the quality of your electricity supply, including outages
  • provide data that you can use yourself or give to third parties to find cheaper electricity deals or more flexible pricing plans
  • reveal usage statistics that can help you pick out suitable home solar systems
  • allow you to sell solar energy to the grid.

How to read a smart meter

While smart meters generate more detailed data, the device itself won't display all this information to the household.

Instead, users can only access the data once it's been made available by a third party – their electricity retailer or distributor – or by investing in an in-home display.

The simplest and cheapest way to read your smart meter is through your energy retailer's app. Powershop, Origin Energy, AGL and Energy Australia all have apps that let you track energy use being measured by your smart meter, while most other retailers will display this information on your online account.

Alternatively, you can buy an in-home display, which connects to your smart meter and shows you at any given time how much electricity you're using and how much it's costing you.

In Victoria, you can get a rebate of up to $120 to help cover the cost of one of these displays as part of the state's Energy Upgrade program.

How to get a smart meter

Because all states and territories have made smart meters the default for new and replacement meters, it's likely you'll be offered one if your existing meter breaks or if you're building a new house, for example.

But if your current (non-smart) meter is working fine and you're not connecting a new property to the grid, you can get a smart meter by asking your current retailer for one.

The company may be able to install one on your property, but if they can't, check with other retailers operating in your area. They may offer you a smart device, but you will have to switch your home energy plan to that retailer to take advantage of this.

Your retailer may also approach you, even if your old meter is still performing properly, and offer you a smart meter or a product that comes with one.

Smart meters for renters

Unfortunately, the rules for installing smart meters on leased properties are complex – the AEMC admitted as much to CHOICE when we asked if they could explain them to us.

A number of electricity retailers do say, however, that they can install one on a property at a renter's request, without the permission of the landlord.

But it's still a good idea to check with your landlord first, as there may be faulty wiring or another electrical issue at the property that you're not aware of.

If you don't want a smart meter

If you live in New South Wales, Queensland, the ACT, Tasmania or South Australia, you can only refuse a smart meter if your current meter is still working properly and you didn't waive your right to opt out of getting a smart meter when you signed your electricity contract.

If this is the case and your retailer approaches you about installing a smart meter, thay have to give you two written notices detailing your ability to opt out.

But, if you need a new meter in order to keep receiving electricity or to connect a new property to the grid, you'll have to get a smart meter.

If you're concerned about having a device with remote communication capabilities installed at your home, you can ask for that function (the 'smart' part of the meter) to be turned off, but be aware there may be ongoing costs associated with this.

If you're in Western Australia and the NT, you can't avoid getting a smart meter installed at your property, but you can have the communication function disabled.

In Victoria, smart meters are mandatory and have already been rolled out to almost all homes and small businesses, so opting out is not an option.

Saving money with a smart meter

Having a smart meter means your retailer can offer you a flexible or time-of-use plan, which may save you money, depending on how you consume energy.

These sorts of pricing plans are designed to reflect the costs of managing the electricity network, with electricity prices higher in periods of heavy demand, and lower during times when there's typically less strain on the grid.

The typical flexible pricing plan operates across three time periods – peak, off-peak and shoulder. (Plans vary in both pricing and times, depending on your energy provider and the state you live in).

An example of the time periods in a flexible plan in NSW:

Peak: 2pm–8pm weekdays (no peak on weekends).

Shoulder: 7am–2pm, 8pm–10pm weekdays; 7am–10pm weekends.

Off-peak: 10pm–7am every day.

Peak prices are higher than a flat rate (where the price is always the same), while the off-peak rate should be lower. The shoulder price should be slightly lower than a flat rate.

Flexible pricing won't suit everyone and will be most beneficial for households that can hold off using some of their energy until the cheaper off-peak periods (for example, setting the dishwasher to run at 10pm instead of straight after dinner). 

The most suitable appliances to shift to off-peak times are those that guzzle energy and don't need to be used on demand throughout the day. These include:

Having a smart meter also means your electricity distributor can monitor the quality of your supply more closely and detect outages more quickly, while your retailer won't have to estimate your usage and can charge you only for the exact amount you use, meaning you may get better value for money from your utilities.

Words of warning

It's important to note that your bill may go up right after you switch to a time-of-use scheme if you don't adjust your consumption patterns straight away.

And watch that your retailer doesn't put you onto an overly complicated tariff system after your smart meter is installed. Some of these, such as demand tariffs, are considered by experts to be bad for residential customers.


An example of a weekday flexible pricing structure.

Using a smart meter to find a cheaper electricity deal

The more detailed data that a smart meter provides can help you to see if the deal you're being offered is the best one.

But this can mean sifting through lots of numbers – something energy economist Professor Bruce Mountain admits is no easy task. 

"It's not just a case of being able to analyse smart meter data. It's also knowing the rates of all competing flexible or time-of-use tariffs on offer in the market," he says. "This is a tremendously complex and data-intensive calculation."

Fortunately, there are third-party services that can do some of the work for you.

It's not just a case of being able to analyse smart meter data. It's also knowing the rates of all competing flexible or time-of-use tariffs on offer in the market

Energy economist, Prof Bruce Mountain

In Victoria, smart meter data can be uploaded to the government's Victorian Energy Compare service, which will combine it with information about your household and current electricity market offers to suggest an optimal electricity plan.

In fact, any Victorian household can get a $250 Power Saving Bonus just by comparing their current energy plan with others on the market.

For other states and territories (excluding the NT and WA), the federal government's Energy Made Easy comparison site will similarly analyse your smart meter data and show what you'd be paying on different plans.

Smart meter cost

In many cases, the cost of a smart meter will be absorbed into your daily supply charges, like the cost of other electricity infrastructure such as poles and wires.

One exception is if there are complications with the installation and extra work is required – most companies will charge an additional fee for this. For example, Powershop charges a levy fee of no more than $100.

Other retailers may charge upfront if the customer has requested the installation (and are not just having a broken meter replaced). Origin Energy, for example, may charge a meter works admin fee of $60.50. 

Home occupiers requesting a smart meter in WA may also be charged upfront, but not if the meter is being replaced for maintenance purposes. There's no cost to consumers getting a smart meter in the NT's similarly-regulated electricity market.

CHOICE tip: Be sure to ask your retailer about any upfront and ongoing associated costs of the new meter and how these will appear on your bill. The retailer is required to disclose these before they install the meter.

How a smart meter works with solar

A smart meter's ability to show daily energy consumption makes it useful when deciding what size solar array you need for your home. 

Having a smart meter also gives you access to more sophisticated electricity tariff structures, including net metering arrangements that let you consume energy your solar produces as a priority, before selling any excess to the grid.

But a smart meter can't tell you exactly how much power your solar system is generating – it can only provide a net assessment of how much energy you're drawing from the grid against how much you're exporting.

Additional technology is required if households want to monitor the output of their solar array or how efficiently it's operating, or investigate the difference a battery could make to their energy mix.

We care about accuracy. See something that's not quite right in this article? Let us know or read more about fact-checking at CHOICE.

Stock images: Getty, unless otherwise stated.