New technology, data validation and testing problems have stalled the installation pace of smart meters in India, with less than 10 per cent work being completed even as sanctioning and awarding for the same has been on track.

Around 2.18 crore smart meters have been installed across the country against 22.24 crore sanctioned and 13.80 crore awarded as of February 18, 2025. The process of installing 25 crore meters has to be completed by March 2026.

• Also read: Tamil Nadu smart meter project faces setback as tender is cancelled

A top state government official said that states understand smart meters are critical for financial viability of Discoms and the sector’s growth. However, legacy issues and cross-subsidisation have led to an outdated billing and IT infrastructure that is dragging the project.

Besides, complex tendering processes, logistical challenges, infrastructure upgrades and protests by end consumers in some regions are exacerbating delays, he explained.

Installation delays

Last month, Minister of State (MoS) for Power Shripad Naik in a written response in Rajya Sabha said the Ministry is regularly monitoring smart meter installations by Discoms and is taking action to resolve implementation issues between Advanced Metering Infrastructure Service Providers (AMISPs) and Discoms.

He attributed the delays in installation to smart meters being a new concept, and there were delays in the issue of tenders and establishment of a direct debit facility.

Collection and validation of data for consumer indexing and delays in testing and approvals such as field installation and integration test, factory acceptance test, etc are other reasons for the delay, the Minister added.

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Arindam Ghosh, Partner for Power Sector Advisory at Nangia & Co, said there are several challenges, including slow tendering and contract awarding, issues with new technology, data validation and testing problems, high costs, inadequate communication infrastructure, interoperability issues and so on.

For instance, Ghosh pointed out that interoperability challenges have hindered automatic data acquisition and complicated system integration, slowing deployment across states.

Shivam Bajaj, CEO of investment banking firm Avener Capital, pointed to the resistance from end customers as bills in certain cases have been higher. Smart meters record the quantum of electricity consumed, while reading from old meters is not as accurate.

Ghosh emphasised that simply installing smart meters is not enough to reduce AT&C losses. It must be accompanied by process and system improvements.

Offering both postpaid and prepaid options provides flexibility, catering to cultural payment preferences, with regulators and utilities determining the best approach, he noted.

“In Assam, for instance, the pre-RDSS scheme is enabling consumers to monitor electricity usage, resulting in reduced consumption, accurate billing and lower distribution losses. Reports show that 44 per cent of consumers in Assam saved about 50 units per month, benefiting both consumers and Discoms by improving efficiency and reducing financial losses,” he added.

This has also contributed to Assam’s improved ranking in the latest Integrated Annual Discoms ranking.

• Also read: TN, Rajasthan lag other States in smart meters installation 

Future bright

Bajaj stressed that despite teething problems faced in installation, the future prospects are bright due to the value that such devices will unlock for the sector.

“The escrow framework is very robust. I think for the metering players also on the OEM side, exports and foray into gas meters and water meters could be a compelling opportunity which is untapped as yet but holds tremendous promise,” he added.

Ghosh too sounded confident about the future benefits that smart meters can unlock.

“Financial incentives and a standardised Total Cost of Ownership (TCO) approach, which ensures long-term cost efficiency, should also be introduced. Addressing the skilled manpower shortage, potentially through institutions like NPTI, will accelerate progress,” he suggested.

According to the Central Electricity Authority, there are around 2.50 lakh 11 KV feeders, 1.51 crore distribution transformers and 34.18 crore end consumers.

There are about 34.18 crore consumers, out of which about 32.23 crore (94.29 per cent) consumers are metered.

About 80 per cent consumers are domestic followed by commercial (9 per cent) and agriculture (8.13 per cent). Urban consumers are about 13.81 crores (40.42 per cent), while rural consumers are 20.36 crore (59.58 per cent).