China is planning to spend between $2.5 billion and $3 billion per year to deploy hundreds of millions of advanced electricity meters between now and 2020 -- all part of its push to become the single biggest smart grid market in the world. But China’s smart meter rollout is going to look a lot different than those we’ve seen so far in the U.S. and Europe.

First of all, China’s smart meters are going to be quite a bit less expensive than their Western counterparts. Key government-controlled utility State Grid Corp. of China are targeting meters that cost about $50 apiece or less, compared to the $150-and-up ranges seen in North America and the $100-and-up for European smart meter projects.

Another important difference is that China is expected to reserve large chunks of its smart meter market to domestic metering companies like Ningbo Sanxing Electric, Wasion, Hi Sun Technology, Linyang Electronics and Holley Metering. But while the meters may bear Chinese names, the technology inside them may well come from abroad.

Take the joint venture between China’s Holley and Echelon Corp. (ELON), the San Jose, Calif.-based smart grid vendor. On Monday, the partners announced some new milestones and pilot projects for its jointly developed technology that help lay out just how China’s smart meter landscape is going to differ from what we’ve seen deployed so far in the West.

The JV, officially named Zhejiang Echelon-Holley Technology Co., launched in March with the goal of adapting Echelon’s powerline communications (PLS) networking and control software technologies for China’s market. Monday’s news included two new pilots of the technology, the first a 30,000-meter deployment in Inner Mongolia, and the second a 20,000-meter pilot in Shanxi province.

This isn’t the only joint venture between a Chinese metering vendor and a foreign company. Last month, Siemens and Wasion Group announced a JV aimed at delivering Siemens’ smart grid technology to the market, including a meter data management and analysis platform from eMeter, bought by Siemens for an undisclosed sum late last year.

Likewise, smart metering giant Landis+Gyr, which was bought by Toshiba for $2.3 billion in 2011, announced in March that it was partnering with Chinese telecommunications giant Huawei to jointly develop a communications hub for connecting smart meters and home energy devices -- though the two named the U.K., rather than China, for its initial target.

Of course, given its massive future market potential, China is doubtless going to be the target of more such partnerships. China deployed roughly 12 million meters in the fourth quarter of 2011, and is expected to need up to 300 million smart meters by 2016 or so. Overall, China will invest nearly $250 billion into its grid in the next five years, according to GTM Research’s report, The Smart Grid in Asia, 2012-2016, Markets, Technologies and Strategies.

But there’s an important caveat to keep in mind when talking about China’s current smart meter deployment figures, Varun Nagaraj, Echelon’s senior vice president of product management and marketing, said in an interview. Simply put, a lot of the meters deployed so far haven’t actually been made “smart” yet.

That’s because China has decided to split up its smart meter deployments into separate metering and communications components, Nagaraj said. It’s possible that millions of smart meters deployed in China to date may not yet have the communications modules that allow them to connect to the smart grid at large. That’s very different than in the United States and Europe, where smart meters tend to have metrology and communications combined “under glass” in a single unit, he said.

Even so, while China may not have mandated that every new meter come with communications enabled, it has mandated that all meters and all comms modules can interoperate, Nagaraj added. That’s been done through a common State Grid certification process to prove that meters and communications modules can talk to one another via a common format.

That means that the Echelon-Holley JV’s communications modules, while currently being installed by Holley, should be able to plug in to any other meters being built to China’s interoperability standards, he said.

Zhejiang Echelon-Holley isn’t the only vendor targeting China’s template for a smart meter architecture that can be deployed in a modular fashion. Shanghai-based Miartech, which raised $6 million from DFJ DragonFund in 2006 (PDF), and an investment from Intel in 2010, has been named one of three technologies to guide PLC standards for the country by State Grid Corp. of China, the country’s massive national utility.

Likewise, Swiss chipmaker STMicroelectronics is staking a claim in smart metering in China; Norwood, Mass.-based Analog Devices is working with China’s Nanjing NARI; Milan, Italy-based Accent is working with Chinese PLC comms maker Topscomm; and Singapore-based Semitech is putting its PLC chips in meters built by LangFang Gao Shan, to name a few more examples.

At the same time, partnerships with better smart meter-communications technology combinations can expect to win out over less-capable competitors. For example, the Inner Mongolia pilot project that the Echelon-Holley JV is supporting has also been testing other varieties of PLC technologies for the past three years, though Nagaraj wouldn’t say if Echelon is replacing or merely augmenting those technologies.

PLC isn’t the only communications technology being used in China, either. Backhaul networks that connect local smart meter networks including Echelon’s to utility offices can be cellular, fiber or a variety of technologies. Glen Canyon, a Santa Cruz, Calif.-based startup that’s promising to sell millions of meters for $25 and under to China, is including 6LoWPAN wireless radios for connecting its meters in local mesh networks.

Eventually, of course, participants in China’s many smart meter pilot projects will want to land bigger pieces of the rollouts to come. Inner Mongolia is expected to add 10 million new smart meters over the next five years and the Shanxi province is targeting 10 million new smart meters over the next three years, according to Echelon. We’re bound to see multiple combinations of technologies play a role in these broader-scale deployments to come.