Powerpal connects to an optical port on the front of your electricity meter.
Check out the video at https://www.powerpal.net/install.
Before the introduction of digital meters electricity was measured by a rotating disc that would spin faster or slower depending on the amount of energy consumed at your home. By watching how fast this disc was spinning you could get an idea of how much energy was being consumed at any given time. If the disc was spinning slowly then that would indicate low energy consumption and if it was spinning quickly that would indicate high energy consumption.
These older energy meters are now being replaced by digital meters which do not have a mechanical spinning disc, but instead measure energy consumption electronically.
In order to ensure energy users still have an indication of how much power is being consumed the metering companies added a (usually red) flashing light to the front of the digital meter to serve the same purpose as the spinning disc - when energy consumption is low the light flashes slowly and when consumption is high the light flashes faster. So by observing the light on your meter you can tell if energy consumption is high or low at any given time.
Powerpal makes observing your energy consumption more convenient by transmitting these flashes to an app on your mobile phone. Not only does this mean that you don't have to go to your meter box every time you want to check your consumption, but by counting the exact time between each flash generated by the meter and recoding the number of flashes generated over time the Powerpal app can give both a highly accurate read out of your current energy consumption in real time and a detailed historical overview of your homes energy consumption over days, weeks and months!
It's important to note that Powerpal does not measure electricity consumption directly, rather it simply records the light flashes generated by your energy meter. So it is particularly important if you have solar panels to check that your meter stops flashing its light when your solar is exporting (e.g. by checking the light does not flash during the day) - otherwise Powerpal can't accurately determine your energy consumption from the flashes.
For more details check out the meter compatibility list here: