A 'smart meter' is an electronic device that can measure and control energy or water consumption through two-way interaction between a measurement unit and a control unit. Meters are available for electricity, gas and water gas consumption. The difference between a smart meter and conventional metering is the storage of data usage, identification of resource use by individual appliances/machines, and potentially the control of the resource use.

Smart metering has improved significantly over the past decade and investment costs have also come down as the technology matures and more players enter the market. Vastly improved information is now available about patterns of power consumption and increased control over consumption, e.g. through identifying wasteful appliances that should be replaced, by benefitting from low electricity prices during off-peak hours and by tracking power or water use over time.

The benefits yielded by smart meters largely depend on how SMEs use the information they provide (e.g. switiching off power-hungry devices, adapting green office or production practices, etc.). Typical businesses save € 550 a year after installing smart electricity meters, with only a 10-month payback period on average. Smart meters therefore provide direct benefits for SMEs, but also play a key role in contributing to a ‘smart grid’ (in case of energy) where decisions on power provision, transmission, use and storage are made intelligently, using superior information on supply and demand. This will, in time, decrease energy costs, increase energy security and contribute to a shift towards a sustainable economy. 

"Smart meters for gas, water, and electricity were installed and benefits were structurally tracked. Results showed that the typical participant generated around € 1 300 in annual savings by saving 375 m3 of water, 13 500 kWh of electricity savings and 30 000 kWh of gas savings. This corresponded to 8.5 tCO2 savings per SME. This relatively high level of savings compared to other averages as described in the factsheet is due to the energy advice which was given as part of the pilot programme. For participants that only received the data directly from the meters, the typical savings were 60 % lower, but still substantial." - Carbon Trust, Advanced metering for SMEs, pilot study of 580 SMEs (2006-2008)