Abstract: Electricity theft remains a significant challenge in modern power distribution systems, leading to substantial economic losses, reduced system efficiency, and degraded power quality. Traditional metering systems lack real-time monitoring and fail to detect unauthorized consumption effectively. This paper proposes an Internet of Things (IoT)-based smart energy theft detection system that utilizes the principle of current imbalance combined with a prepaid billing mechanism.

The system employs dual current sensing points at the input and output sides of the energy meter to continuously monitor current flow. Any discrepancy between these values indicates potential theft. The Arduino-based controller processes the sensor data and triggers immediate actions such as visual alerts on an LCD, audible warnings through a buzzer, SMS notifications via a GSM module, and automatic power disconnection using a relay. Additionally, an RFID-based prepaid billing system ensures controlled energy consumption by allowing users to utilize electricity based on available balance.

The proposed system offers a cost-effective, scalable, and efficient solution for real-time monitoring, theft detection, and energy management, making it suitable for residential and small-scale industrial applications.

Keywords: IoT, Energy Theft Detection, Current Imbalance, Arduino, GSM, RFID, Smart Energy Meter, Prepaid Billing.

Downloads: | DOI: 10.17148/IJIREEICE.2026.14353