Smart Meters are being hailed as the next new must have. With pundits saying they can revolutionise the way household energy is consumed, and lower energy consumption by up to 10%, it looks like they’re here to stay.

A new report, Smart metering in the Energy and Utilities sector, predicts that the smart metering industry will experience an estimated 41% increase in Europe and 89% in North America in the next five years.

This projected rise is supported by the fact that installation of smart meters is vital to the conservation policies of several governments making it mandatory for utilities revamp existing systems. Very often utilities have a legal obligation to make this move. In Europe, for instance, it’s a move that’s encouraged by EU’s 2006 Energy Services Directive.

So how are smart meters superior to traditional systems? For starters, they tell customers how much energy they’re consuming in terms of the amount of money they’re spending on energy rather than in kilowatt-hours, making it far easier for customers to understand the extent of their spend.

Analysts suggest that communicating to people how much energy they’re using is particularly valuable during periods of peak use, such as in summer. When the mercury rises, people tend to use air conditioning units much more. As this happens on a large scale, it sometimes makes it necessary for the utility to import power at high costs to meet the demand. Smart metering immediately lets customers know that there are higher tariffs for this period of peak use, so that they can decide not to use power at the time.

There are smaller, but equally important conveniences for consumers with the new meters. Unlike traditional meters which were boxes buried under the stairs and all-but forgotten, the new system can have displays positioned in areas right in the range of the owner’s vision.

The newer meters are also good news for the utilities themselves. They let the energy supplier to track the amount of energy being consumed at large in near real time, and so help them to manage their power loads better. In fact, these meters do away with the need for manual readings and information is sent automatically to the supplier – either by power cables or a short-range radio link. The utilities can also save in terms of manpower performing manual reading duties and also in call centres which deal with inaccuracies in billing.