On the surface, a smart grid system sounds like it has great potential from controlling our appliances and saving us money to keeping the world green. On the other side, we could face security, privacy and health issues. These concerns need to be addressed before we can feel comfortable with the smart grid.
In the smart home, each appliance has a unique signature. It is possible to determine which appliance is in use and at what frequency. Using software, it is possible to determine what appliances are in a house, when they are used and how long each is in operation. All of this information can be had through the smart meter. 
This opens the home owner to the possibility of invasion of privacy. The big question is who will have access to this information and how will it be used.
So, what are the solutions? Regulatory controls would prevent most information from getting to third parties, unless requested by the consumer. The penalties will need to be high and strongly enforced. Utilities and equipment manufacturers will need to identify cyber vulnerabilities and develop a system that would mitigate the threats. A secure means of communications between devices and control systems needs to be put in place. Many of the smart meters that have already been installed, do not have the security protocols in place yet. Utilities must have the tools needed to assess their security. Utilities have never had to face the problems that confront them with the smart grid. They know little of how to protect against cyber attacks.
