Smart Metering in India: Building a Digital Foundation for a 24/7 CFE Future

DISCOMs are at the center of India’s energy transition, responsible for delivering electricity to millions of consumers and integrating rapidly growing shares of renewable energy into the grid. But most face serious operational and financial challenges. According to the PFC Report (2023-24), AT&C losses worsened to 16.1%, billing efficiency slipped to 86.9%, and accumulated losses now exceed ₹6.9 lakh crore ($79 billion). With borrowings exceeding ₹7.5 lakh crore ($86 billion) and over 20% of total revenues dependent on tariff subsidies, DISCOMs face mounting pressure to improve efficiency while ensuring the cost-effective integration of renewable energy.

Smart meters have emerged as a central pillar of India’s Revamped Distribution Sector Scheme (RDSS), designed to modernize the grid, improve financial sustainability, and enable consumer-centric reforms. By enabling automatic and granular (hourly or sub-hourly) consumption data collection, real-time billing, and tamper/theft detection, smart meters give DISCOMs better visibility to reduce losses, improve billing efficiency, and manage demand dynamically. Through Time-of-Day (ToD) tariffs, they incentivize consumers to shift usage to periods of abundant, cheaper solar power, while supporting storage integration and demand-side flexibility. Beyond accurate billing, smart meters form the digital backbone needed to strengthen DISCOM finances, empower consumers, and enable cost-effective renewable integration as India moves toward its Round-The-Clock (RTC) clean energy and 24/7 carbon-free energy (CFE) goals.

Opportunity

India’s transition to a clean energy future is facing a dual challenge: solar surplus midday and sharp evening demand ramps, as shown in the graphs below.

During midday peak solar hours, as shown in Ember’s analysis, India witnesses price cannibalization in wholesale markets. Market Clearing Prices (MCP) crash because solar generation floods the grid, but domestic demand remains flat. At the same time, as shown in the Greening the Grid study (USAID + MoP), India faces a massive 92 GW evening net load ramp, where coal and hydro plants must rapidly scale up to meet demand after solar generation drops.

This mismatch between hourly generation patterns and rigid consumption patterns highlights the urgent need for a robust demand and supply management and flexibility solution enabled by energy storage. By capturing hourly or sub-hourly electricity data (e.g., 15-minute interval data), smart meters enable granular electricity accounting, allowing consumers and DISCOMs to match energy use with renewable generation in real time, leveraging storage and demand response.

A recent TransitionZero analysis shows that achieving 70% round-the-clock (RTC) clean electricity by 2030 could cut net system costs by 35% and deliver ₹6,000+ crore (~$686 million) savings by reducing reliance on expensive thermal generation and minimizing renewable curtailment. Unlocking these benefits, however, requires granular consumption data and demand-side flexibility at scale.

Looking ahead, this granular data unlocks the path to 24/7 carbon-free energy (CFE), where every unit of electricity consumed can be matched with renewable generation hour by hour. As more corporations and cities adopt 24/7 clean energy targets, smart meters become the digital backbone that connects household energy use with climate goals, driving a more efficient, sustainable, and consumer-centric energy future.

RDSS: India’s Ambitious Smart Metering Program

Launched in July 2021 by the Ministry of Power (MoP), the Revamped Distribution Sector Scheme (RDSS) is India’s flagship reform program for improving distribution efficiency and DISCOM financial health.

Smart Metering Under RDSS

The RDSS has adopted a service-based TOTEX model to accelerate smart meter deployment. Instead of utilities managing procurement and installation, AMISPs handle end-to-end implementation, from supplying meters and setting up communication systems to maintaining them for 10 years under strict Service Level Agreements (SLAs). DISCOMs pay per-meter-per-month (PMPM) charges over the contract period, with central subsidies covering part of the cost.This structure reduces upfront financial burden on DISCOMs.

Who Pays the Price? Understanding the Costs and Risks

The rollout of smart meters under the RDSS involves significant investments, and understanding who bears these costs is crucial. While the AMISPs are responsible for procuring, installing, and maintaining the meters, the costs are ultimately recovered through a mix of central subsidies, DISCOM payments, and, in some cases, consumer tariffs.

However, Prayas’ analysis highlights significant cost variability across states and the risks it poses to consumers. PMPM rates under the RDSS range widely, from ₹6,975 (~$80) to ₹14,697 (~$168) per meter, suggesting that many DISCOMs may have awarded smart meter contracts without proper cost benchmarking.

In the state of Karnataka, opposition parties have alleged a ₹7,500-crore scam (~ $0.9 billion) in the awarding of smart meter contracts and have even challenged the mandatory installation policy in the High Court. Critics argue that inflated costs could place a heavy financial burden on consumers, while the state government maintains that the pricing includes not just meters but also the supporting communication systems, data management platforms, and 10 years of maintenance.

A similar concern has emerged in Maharashtra, where MSEDCL’s (Maharashtra State Electricity Distribution Company Limited) ₹27,000-crore ($ 3.1 billion) rollout, covering about 2.27 crore meters (22.5 million), could result in a tariff increase of approximately ₹0.30 per unit (~ $0.003/kWh), depending on cost pass-through and the state regulator’s approval.

These examples highlight the need for transparent bidding processes, better cost benchmarking, and stronger regulatory oversight to ensure that consumers are protected and the benefits of smart metering are realized.

Consumer Perspective: Benefits and Concerns

For many consumers, smart meters promise control and transparency, but rollout experiences vary widely across states.

Potential Benefits:

• Better Billing Transparency: According to RDSS FAQs, consumers can access their smart meter data via their utility’s mobile app or portal. This provision supports billing transparency and consumer engagement, although implementation varies across states.
• Prepaid Options: Smart meters enable prepaid and postpaid modes, giving consumers control over monthly usage and avoiding bill shocks. The option lies with the utility based on the regulatory provisions.
• ToD Tariffs: Smart meters allow Time-of-Day (ToD) tariffs, incentivizing consumers to shift usage to off-peak hours or invest in demand side flexibility solutions to save on costs.

Potential Concerns:

• Billing Shocks: Multiple reports from Pune and Nagpur confirm complaints of bills doubling or tripling after ToD smart meters were rolled out.
• Consent Issues: In several states, consumers have raised concerns about unauthorized smart meter installations without proper consent, leading to protests (e.g., Maharashtra).
• Privacy Risks: Fine-grained consumption data must be safeguarded.
• Awareness Gaps: Consumers are unaware of ToD benefits, app-based tools, and billing processes.

Global Lessons in Smart Meter Rollouts

Globally, countries have embraced smart metering to enhance grid visibility, demand response, and renewable integration:

• Italy: Among the earliest adopters, with near 95% coverage, enabling dynamic tariffs and real-time outage detection.
• United Kingdom (UK): Targeting 53 million smart meters under its Smart Metering Implementation Programme. Critical to their progress has been a consumer trust and engagement strategy, emphasizing data privacy, accessibility, and proactive support.
• Nordic countries: Large-scale deployment (e.g., near 95% coverage in Norway), using smart meters to enable 15-minute interval data for 24/7 carbon-free energy (CFE) tracking and granular energy certificates.
• United States (US):. ~119 million smart meters installed (72% of all meters, 2022), with 88% residential coverage. Enables hourly data collection, two-way communication, and supports dynamic pricing and demand response.
• China: World leader with 500M+ meters deployed, integrating distributed energy resources and grid balancing.

The experience of countries like Italy, the UK, the US, China, and the Nordics shows that large-scale smart meter rollouts are most successful when they are part of a well-coordinated strategy. These countries focused not just on installing meters but also on building supporting systems, like integrated billing platforms, transparent data-sharing frameworks, and strong consumer engagement programs.

These lessons are especially relevant for India, where concerns around bill accuracy, privacy, and cost transparency have already caused public pushback in several states.

Looking Ahead: Building Trust and Unlocking Long-Term Value

Smart meters can be a critical enabler of India’s energy transition, but only if transparency, accountability, and consumer trust are at the core of their deployment. By combining robust regulatory oversight, India can unlock:

• For consumers: lower bills, better visibility, and greater control over energy use.
• For DISCOMs: reduced AT&C losses, better demand forecasting, and operational efficiency.
• For climate goals: deeper integration of renewables and progress toward 24/7 carbon-free energy.

If implemented effectively, India’s smart metering program can go beyond improving billing; it can reshape electricity markets, empower consumers, and lay the foundation for a transparent, flexible, and sustainable energy future.

Note: All INR to USD conversions in this article are based on the average exchange rate for August 2025, 1 INR = 0.011434 USD (source: X-Rates ).