I wanted to read the data of my analogue water meter with an arduino. The water meter has a small cog wheel made of some reflecting material. Just have a look at the images. The first idea was to illuminate this wheel with a bright light source and detect the reflected light. After a lot of experimenting I had to drop this idea. The problem was, that the cog wheel did not reflect the light uniformly for each tooth. Some teeth did reflect the light to the sensor while some other teeth did not.
So the next idea was to measure the reflected light intensity of one of the red arrows. The arrow with the 0.001 scale measures 1 litre each turn. A green super bright LED was used to illuminate the water meter display and a photo transistor with a simple amplifier should detect the signal.
It is important to use a green LED because green is the complementary color to red. The red arrow will absorb most of the green light while the white background will reflect most of it.
The first try without some dedicated optics resulted in a not so stable result. After a lot of fiddling with the screws I decided to attach a simple lens. But all lenses I could find were quite expensive and it was very hard to find one that fits the small diameter I needed. But there is a cheap very effective alternative on eBay. I found a complete camera replacement module for just 3€ for a samsung smart phone "Samsung S8500 Kamera Kameramodul GT-S8500".

http://www.ebay.de/itm/252821221343?_trksid=p2057872.m2749.l2648&ssPageName=STRK%3AMEBIDX%3AIT

But I think any other smart phone camera module will do this job. You will need to disassemble the complete camera module. The only part needed is the lens.

The result was quite good. I could see a strong signal on the scope. (Between 2.5V and 3.5V while the red arrow is turning around)

The complete design consists of the water meter sensor device, a box for the electronics and the electronics itself.

Beneath the printed parts you will need two two threaded rods (ca. 80mm length and 3mm diameter), 2 M3 nuts, 2 M3 locking nuts and a few washers.

I reused an old USB-A socket that I glued into the water meter cap to lead the electric connections out of the sensor. Some heat shrink tube is also very useful.