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How Does a Prepaid Electricity Meter Work?

In the modern field of electrical energy management, prepaid electricity meters, as an innovative metering device, have completely transformed the traditional "pay-after-use" model. Many users are curious about their operating mechanism. Understanding how they work can not only dispel doubts, but also help us recognize the value of their efficient management. The operation of a prepaid electricity meter is an automated closed-loop process integrating energy metering, cost calculation, communication and control functions. Its core lies in achieving precise control and management of electricity consumption through a prepayment-based model.

I. Core Mechanism of Energy Metering and Cost Deduction

The operation of a prepaid electricity meter is based on its accurate energy metering unit. Like ordinary electricity meters, its built-in sensors continuously monitor the voltage and current in the circuit, and the embedded processor calculates the instantaneous active power and cumulative energy consumption in real time. This metering process strictly complies with national metrological standards to ensure the accuracy and impartiality of data. At the same time, the meter stores the current valid electricity price parameters. As electricity is continuously consumed, the meter’s microprocessor deducts the corresponding amount from the user’s pre-deposited balance in real time according to the formula: Energy Consumed × Current Electricity Price.
This process is automatic and real-time. Users can check the remaining balance or available electricity at any time via the meter’s display screen, thus having full and transparent knowledge of their own electricity consumption. This design that directly converts physical electricity consumption into economic expenditure is the cornerstone of the prepayment model’s ability to effectively manage energy consumption.

II. Communication Process of Electricity Purchase and Data Loading

The key to realizing "pay-before-use" lies in safe and reliable data exchange. After users make payment through online platforms or offline agents, the electricity purchase system generates a set of encrypted data containing information about the purchased electricity volume or amount. This data needs to be loaded into the meter through a secure medium.
In the earlier IC card model, this set of data is written into a dedicated IC card. Users complete the recharge by inserting the card into the meter’s card reader, and the meter stores the amount in its internal memory after reading and verifying the password. Modern mainstream remote prepaid electricity meters are more convenient, as they are equipped with built-in wireless communication modules (such as NB-IoT, 4G or LoRa), enabling secure direct connection with the back-end management system via mobile networks. After users complete payment, the system sends encrypted recharge instructions directly to the meter through the cloud, allowing instant recharge without manual intervention. This remote communication capability is the core technology for building an intelligent prepaid system.

III. Automatic Management of Balance Early Warning and Arrears Control

A prepaid electricity meter is not only a metering device, but also an automated electricity consumption manager. To give users sufficient buffer time, a balance early warning threshold is set inside the meter. When the remaining balance falls below the preset value, the meter will actively issue an alert—usually through screen flashing, beeping, or sending reminders to the bound mobile phone—to prompt users to purchase electricity in a timely manner.
If the user fails to recharge promptly, when the balance drops to zero, the meter’s control unit will automatically trigger the built-in latching relay based on received instructions, thereby cutting off the power supply circuit to achieve automatic power outage. This control mechanism fundamentally eliminates the occurrence of electricity arrears. After the user successfully completes the recharge—whether via card insertion or remote instruction—the meter will immediately activate the relay to re-close the circuit and restore power supply once it verifies the validity of the data. The entire process of early warning, power outage and power restoration is fully automated, which greatly improves the efficiency of electricity management and reduces the administrative costs of manual payment collection.
In summary, the working principle of a prepaid electricity meter is a closed-loop system integrating precise metering, real-time cost deduction, secure communication and intelligent control. By linking economic expenditure with physical energy consumption in real time, it empowers users with autonomous control over their energy consumption, while providing managers with an efficient and dispute-free tool for fee collection and management. Understanding this workflow helps us make better use of this intelligent device to achieve more scientific, transparent and efficient energy management.

Zhejiang Yongtailong Electronic Co., Ltd.
YTL is a professional supplier of energy meter and AMI solution. the Top 100-enterprise with most investment value in Zhejiang. And“Yongtailong”is the famous brand of Zhejiang. With nearly 20 years' experience in energy metering, we devote ourselves to providing competitive projects and creating value for customers.
Online + Offline. Provide cost-effectiv solutions
● Strict quality control mechanism.High quality assurance
● Five R&D centers,combine with hardware&software design, experiment and testing
Global service capability, provide customers timely and effective solution
● Good customer feedback. Reliable after-sales service

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