Measurement of the active, reactive, and apparent power is one of the most fundamental tasks of smart meters in energy systems. Recently, a number of studies have employed the discrete wavelet transform (DWT) for power measurement in smart meters. The most common way to implement DWT is the pyramid algorithm; however, this is not feasible for practical DWT computation because it requires either a log N cascaded filter or O (N) word size memory storage for an input signal of the N-point. Both solutions are too expensive for practical applications of smart meters. It is proposed that the recursive pyramid algorithm is more suitable for smart meter implementation because it requires only word size storage of L × Log (N-L), where L is the length of filter. We also investigated the effect of varying different system parameters, such as the sampling rate, dc offset, phase offset, linearity error in current and voltage sensors, analog to digital converter resolution, and number of harmonics in a non-sinusoidal system, on the reactive energy measurement using DWT. The error analysis is depicted in the form of the absolute difference between the measured and the true value of the reactive energy.