What is a Smart Meter? And How Xcel Energy’s Solar Reward Metering Works

Updated: Dec 8, 2021

If you are in the greater Denver area, then it is very likely that you may live or work within one of the 1.6 million homes and businesses where Xcel Energy is installing a “smart meter” before the end of 2023. On homes, apartments, and corporate high-rises alike, Xcel has been informing their electricity customers with 90, 60, and 30-day notices before physically installing the new smart meters onsite.

As a company built in Denver, Xcel Energy is one of the many utilities that we work with every day to install solar panels in Colorado and Southern Wyoming. To help our customers and neighbors understand their electricity bills, we’ve developed this guide to help answer some of the most frequently asked questions about smart meters including how they work alongside Xcel’s Solar Rewards Metering program.

Smart Meter FAQ

While relatively new to the area, smart meters are being installed all over the country and world, bringing in a new era of technology to distributed electricity. Although we are just getting started here in Colorado, there are other states such as California, Maine, Oklahoma, Georgia, and Nevada in which over 80% of residential customers already have smart meters installed.

What is the difference between a smart meter and a regular electric meter?

The key difference between a smart meter and a regular (or analog) electric meter is the smart meter’s digital interface and technology. Smart meters are, well, “smart” (like a smartphone vs. a landline) and can measure electricity usage in sub-hourly intervals, instantly transmitting the data back and forth between the property and the utility.

The functionality of traditional, analog electric meters is extremely limited, with a simple dial that moves forward as energy is consumed, and backward as energy is produced from a rooftop solar energy system. For decades, utilities have sent people to physically read meters every month, so “smart meters” are helping to bring residential electricity into the digital world, by enabling instant exchanges of information.

How does a smart electric meter work?

According to The Department of Energy, a smart meter’s defining characteristic is the ability to provide two-way communication between a home and a utility. Not only does this allow for more detailed readings of electricity consumption and production, but real-time communication with the utility can also help pinpoint blackouts and notify personnel.

By breaking down the data into sub-hourly intervals, utilities are able to charge different electricity rates for energy consumption throughout the day based on when it was consumed. On electricity bills, these rates are often reflected as “peak” and “off-peak” hours in addition to special designations for weekends, holidays, and seasonal rates.

Xcel's current Time of Use Pricing structure

Are Smart Meters a good idea in 2022?

Although many utilities like Xcel tend to present smart meters as a way for energy-conscious consumers to save more money, many customers are skeptical about whether or not the new technology can actually help reduce electricity bills. Below, we look at some of the most commonly associated smart meter pros and cons for residential electricity consumers.

Pros of smart meters:

They are able to better analyze electricity use and provide more accurate billing.

  • They can help break down usage by each appliance to spot overconsump