The development of smart grids, supported by IoT technologies, is an epochal moment in the population’s lives: this time brings new possibilities for energy control and management, which is characterized by increased efficiency, reliability, and integration of renewable energy sources. But masses of IoT in smart grid framework present vast information security issues such as issues to information protection, vulnerability to cyber assaults, and worries regarding information honesty. This paper focuses on the importance of IoT-based energy monitoring systems in smart grids, as stressing their cost and efficacy in managing power flows and boosting grid reliability and renewable integration. It methodically assesses the vulnerabilities of such interdependent systems related to data security, along with the technological and regulatory difficulties associated with protecting sensitive materials and ensuring the resilience of such systems in the face of cyber threats. Based on the analysis of the contemporary literature and case studies, this research paper assesses advanced encryption technologies, strong authentication procedures, privacy-preserving methods, and the impact of emerging technologies such as blockchain in developing smart grids’ security posture. This reality is highlighted by the study’s findings, which underline holistic security in the face of technical solutions, regulatory frameworks and industry practices working to manage risks and secure smart grids from emerging cyber threats. The paper provides a valuable contribution to the ever-evolving discussion surrounding security on the smart grid by providing a host of information and recommendations for stakeholders to understand the challenges that characterize IoT technology applications in energy systems governance and data protection.