Smart meters are digital devices which transmit information about electricity consumption and production (feed-in of renewable energy) to the utility provider. Smart meters offer a range of modern applications and allow the end-user to take advantage of dynamic prices and off-peak rebates.
A smart meter is an electronic device that records consumption of electric energy in intervals of an hour or less and communicates that information at least daily back to the utility for monitoring and billing. Smart meters enable two-way communication between the meter and the central system. Unlike home energy monitors, smart meters can gather data for remote reporting. Such an advanced metering infrastructure (AMI) differs from traditional automatic meter reading (AMR) in that it enables two-way communications with the meter.
Source: Wikipedia - Smart meter