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How Electric Meters Work and What Electric Meters Do

A wall of electric meters measuring electricity from the utility.
PublishedApril 5, 2021
UpdatedMay 7, 2024
AuthorCory O'Brien HeadshotCory O'BrienSenior Director - Growth MarketingEditorRyan Barnett HeadshotRyan BarnettSVP, Policy & New Market Development
In this article
Why should you care about your electric meter?
How does an electric meter work?
What units does an electric meter measure?
What is a smart meter?
What is net metering?
Time of Day Metering
Do I get a new electric meter if I go solar?
Slow Down Your Electric Meter With Solar

Your electric meter works continually, measuring the electricity your home consumes and allowing your utility company to bill you for that energy. Most people know what an electric meter looks like, but how much do you really know about it? Do you know how electric meters work, how they measure your usage, and how a power meter is read? Is it analog, digital, or smart? Can your electric meter slow down or even run in reverse with home solar? In this guide, we look at how an electric meter works, what an electric meter does, how to read your electric meter, and more.

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Why should you care about your electric meter?

Let’s start with a simple question: “What is an electric meter?” In basic terms, an electric meter (also called an electricity meter, electrical meter, or energy meter) is a device that measures the amount of electricity that’s consumed by a building.

Your home’s electric meter has a big influence on how your utility company can bill you for power consumption. For example, if you're using an older analog meter, your utility company only knows how much electricity you have used between a previous reading and a new reading, and they can only get that data by sending a worker out to take the reading. The utility doesn't have insight into the amount of electricity you use at any specific time, or when you use the most electricity, so they can only use one rate to bill you for all of the electricity you have consumed.

A newer smart meter gives your utility company better and more immediate insight into the amount of electricity you consume, and when you are consuming that electricity. If you have a smart meter installed, your utility can gather more information about your power usage habits, and they can change the way they charge for electricity.

Examples of alternative rates that a utility can charge with smart meters include:

  • Time-of-Use Rates - The rate you pay for power varies based on the time when you use that electricity.
  • Demand Charge Rates - You are billed based on the maximum amount of energy you draw from the grid at any one time.

Depending on the type of rate your utility uses, and when you use electricity the most, you may end up paying more or less for your power with a smart meter. The good news is, if your utility collects more data on your power usage, they may share that data with you, which you can use to understand your consumption better, and how your energy use impacts your monthly bill.

The type of meter you have also impacts the ease of solar power installation. If you’re using a smart meter, solar installers can gather more details about your usage to design a system that will address your needs. And depending on your utility company, it may not be necessary to install a new meter after going solar if you are already using a smart meter.

Who owns the electric meter?

You may be surprised to learn that your home’s energy meter is not your property. Your utility owns the electric meter for home energy measurement, and is responsible for installing, maintaining, and reading it. Tampering with a residential power meter is not authorized, and is a punishable offense. (Not to mention it can be highly dangerous!)

If you need to have your meter changed, moved, or adjusted, you must work with your utility to get that work done.

How does an electric meter work?

You’ve probably stared at the spinning numbers on a power meter and wondered, "What does an electric meter do, and how does it calculate my energy consumption?" The disc in an analog meter simply spins the multiple measurement dials as you pull kilowatt-hours (kWh) of electricity from the grid, resulting in a new reading. The difference between two readings — the current reading and the previous reading — helps your utility company determine your energy usage and the amount they should bill.

If you have an older meter, you may have noticed a utility worker coming to your home every month to take the current meter reading. If you have a smart meter, you won't see any utility worker physically visiting your home to read the meter, because a smart meter is designed to communicate directly with your utility to share your current usage details.

Some smart meters communicate via a cellular signal, but it is also possible that your smart meter is emitting radio waves, and a utility worker will drive through your neighborhood to collect meter readings. Smart meters with radio waves still allows the utility to collect data without visiting your home, but it doesn’t communicate directly with the utility like a cellular smart meter does.

If you decide to install a solar power system, your utility may require you to swap your old meter for a new meter. If you live in an area with net metering, the new solar meter will help determine how much electricity you are pulling from the utility, as well as how much energy you are feeding back into the grid.

How An Analog Electric Meter Works

Most homes and businesses not fitted with a new smart meter have a traditional analog meter. This mechanical meter is normally enclosed in a glass or plastic housing (to reduce the possibility of tampering) and has a metal disc inside that spins when you are drawing current from the utility’s service wires. If you are a keen observer, you might have noticed the disc moves slower at times of low electricity consumption, and faster during peak usage times.

A mechanical electric meter has two conductor coils that create magnetic fields. One coil is impacted by the voltage going across the conductor, and the other is affected by the current going across the conductor. The magnetic fields generated by the interaction of these coils then turn a thin aluminum disc at a controlled speed, at a rate proportional to the amount of electricity consumed.

The spinning of the disc moves the dials that indicate the total electricity consumed in kilowatt-hours. A utility worker must visit, read, and record the current readings for you to be billed. You can also read the meter yourself to determine how much electricity you have consumed, and confirm that utility charges are accurate.

How To Read A Mechanical Electric Meter

Knowing how to read an electricity meter is easy if you know what you’re looking for. When reading your electricity meter, review and write down the numbers as they appear on the dials from right to left. In case the pointer is directly on a number, look at the dial to the right. If it has passed zero, use the next higher number, and if it hasn't passed zero, use the lower number. If the dial falls between two numbers, use the smaller of the two numbers.

Keep in mind, your electricity meter never ‘resets’, so you need to take two readings at two different times and compare them to understand your electricity usage over time.

How A Digital Electric Meter Works

There are several types of digital electric meters. The oldest style of digital electric meter is similar to a mechanical meter, measuring electrical flow from the grid into your house, and then uses an analog-to-digital converter (ADC) to convert the readings to a digital signal.

Modern digital meters come equipped with AC (alternating current) sensors that detect amperage and voltage from the grid. These meters do a better job of recording all of the power in a circuit, making them somewhat more accurate than ADC or mechanical electric meters.

Digital meters, unlike their mechanical counterparts, have an electronic display that displays the current reading. You can read the display manually, and the utility company can get readings from the meter with high-frequency signals.

If you have solar power and are participating in net metering, your digital net meter will record your usage, as well as track the energy fed back into the grid, and help utility companies determine your total (net) energy usage and the amount they should bill.

See how much you can save by going solar with Palmetto

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My electric bill is $290/mo

What units does an electric meter measure?

An electrical meter installed in your home measures watts of electricity. If you're looking for what an electricity meter measures, it's helpful to know that a watt is the product of voltage and amperage (aka current) in an electrical circuit: 1 watt = 1 volt x 1 amp. This formula only represents a measure of electrical potential, so an element of time must be added to measure the actual energy usage.

Thus, electrical usage in the home is a measurement of watts consumed over a period of time (hours) and is expressed in the unit kilowatt-hours. To put it simply, a kilowatt-hour is 1,000 watts of electricity used over 1 hour of time.

For instance, if you leave an 60-watt light bulb on for 24 hours, the energy usage will be calculated as follows:

60 watts x 24 hours = 1,440 watt-hours (1.44 kilowatt-hours)

(For a complete guide to watts and other electricity terms, check out: Understanding Solar Power Electricity Terms: Volts, Amps, and Watts.)

How accurate is an electric meter?

Electric meters are designed to record electricity consumed within an acceptable level of accuracy. Any significant error affects both the consumer and the utility company, as it can mean a consumer being overbilled, or a loss to the supplier. The degree of accuracy required is established by the laws of the location in which the meter is installed, and these statutory provisions may also outline the procedures that must be followed in the event of a meter accuracy dispute.

For example, in the United States, the American National Standards Institute (ANSI) has created voluntary standards that form the basis of the testing requirements set by most utilities and utility commissions for their meter requirements. Meters fall into three accuracy classes, 0.1, 0.2, and 0.5, meaning that the meters have an error rate under test conditions that does not exceed .05%, .1%, and .2% respectively. With net metering, the test conditions must be applied twice – once with energy flowing in the forward, or “delivered” direction, and once with energy flowing in the reverse, or “received” direction.

If there’s a dispute over a meter’s accuracy, the meter can be compared with a check meter functioning alongside the disputed meter, or more thoroughly tested at a specified calibration laboratory to verify accuracy.

Note: Most disputed meters are found to be operating as required. If a laboratory can prove the meter has been misregistering, a refund is usually provided, based on how long it’s estimated the meter has been misreading for.

What is a smart meter?

A smart meter operates similarly to a traditional electrical meter, only it sends usage information back to the utility via radio signals or cellular communication — something traditional electromechanical meters can't do. A built-in communication chip allows the smart meter to send meter reading details directly to the utility company, and in return, the utility will usually share that data with the consumer so they can better understand their electricity usage.

Why are more utilities switching to smart meters?

Smart meters allow utilities to determine how much energy you pull from the grid at any point in time. With this information, utilities can come up with better ways of pricing the electricity they provide. They can bill you for the electricity you need, based on when and how much you have used. Moreover, because no workers are required to read smart meters, electricity companies save money on labor and operating costs.

If you decide to go solar, your utility company might require you to switch to a smart meter, because this will give them better information about your energy usage, and make sure they are billing you accurately.

Should I be worried about smart meter radiation?

Smart meters give off radiofrequency (RF) waves (aka low-energy radiation) and some people are concerned about smart meters because the RF waves they produce are the same kind as those given off by cell phones and Wi-Fi devices.

According to the American Cancer Society, “RF radiation doesn’t have enough energy to remove charged particles such as electrons (ionize), and so is called non-ionizing radiation. Non-ionizing radiation has enough energy to move atoms in a molecule around or cause them to vibrate, which can lead to heat but it can’t damage DNA directly.”

How much RF energy you are exposed to depends on how your smart meter sends its signals, and how far from its antenna you are. Since smart meters are typically installed outside, you will be far away from the radiation, and there are walls between you and the smart meter antenna that help reduce your exposure to RF energy even further. As such, the amount of radiation you are exposed to from a smart meter is much lower than the amount you are exposed to from other electronic devices like cell phones.

For that reason, you don't need to be worried about your smart meter increasing your risk of cancer. The RF radiation a smart meter emits doesn’t have enough energy to damage your DNA.

What is net metering?

Net energy metering (NEM) is a billing mechanism that credits solar system owners for excess solar electricity they produce and export to the grid. Your energy usage is measured in both directions with your energy meter, and you can earn credit when you produce more than you consume. That credit can be used to offset the cost of electricity you draw from the grid when your consumption surpasses what your solar system is generating.

If you’re thinking about going solar, net metering can provide a lot of financial benefits, so it’s good to understand how net metering might affect your savings. Here is a Complete Guide To Net Metering, including what net metering is, how net metering works, and why you should consider participating in net metering if it’s available.

Time of Day Metering

Time of Day (TOD) Metering allows utilities to charge different rates for electricity, depending on when that electricity is used. The utilitty divides the day into tariff slots, with low tariff rates at off-peak load periods, and higher rates at peak load periods. By financially incentivizing homeowners to shift their electricity usage to off-peak times, Time of Day Metering makes it possible to control usage on the part of consumers, and for the utility companies to plan their transmission infrastructure appropriately.

Think about a highway that is jammed during peak commute hours, and passable during off-peak hours. Suppose people were charged differently for using the highway at different times, and the rate was also based on their vehicle size. For example, drivers might be required to pay more during peak hours if they drive a large SUV, and less during off-peak hours if they drive a small hybrid vehicle. Faced with this choice, more drivers would try and drive on the highway during off-peak hours, lowering the congestion during peak hours, and smoothing out the traffic flow. Similarly, with TOD metering, consumers are more likely to use electricity when prices are lower, and do things like switch to energy-efficient appliances, and add solar power to their home.

Do I get a new electric meter if I go solar?

Yes, you will usually get a new power meter when you go solar. If you’re in an area with net metering, your utility company will swap out your old power meter for a new net energy meter capable of recording how much energy you are exporting to the grid, and how much you are pulling from the grid. If you have a newer smart meter already, it may be compatible with your new solar power system, but your solar installer will work with the utility to confirm if a new residential electric meter needs to be installed.

Slow Down Your Electric Meter With Solar

Getting a huge electricity bill is not something anyone looks forward to. When you’re using a lot of electricity and the electric meter is spinning quickly, you probably wish there was a way you could just slow it down or even make it run in reverse.

The good news is, you can basically do that with home solar. By producing your own electricity, you reduce the amount of electricity that you need to pull from the utility’s grid, so you slow down the electric meter, and pay less for your utility power. Even better, if you have net metering, you can export power to the grid when your home is producing more power than it’s consuming, which essentially means the electric meter is running in reverse.

Ready to see how much you would save with home solar, and its impact on your electricity meter? Click Here to get a free estimate of how much you can save by going solar with Palmetto, and connect with a solar expert who will help you select the best option for your family’s energy needs.

See what solar can do for you:

My electric bill is $290/mo
About the AuthorCory O'Brien HeadshotCory O'BrienSenior Director - Growth Marketing

Cory brings over 8 years of solar expertise to Palmetto, and enjoys sharing that knowledge with others looking to improve their carbon footprint. A dog lover residing in Asheville, NC with his wife, Cory graduated from UCSB. If you run into him, ask him about the company he founded to rate and review beer!

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