diff --git a/CODEOWNERS b/CODEOWNERS
index c28973ec66f..1a9e4bb62f7 100644
--- a/CODEOWNERS
+++ b/CODEOWNERS
@@ -248,6 +248,7 @@ homeassistant/components/integration/* @dgomes
 homeassistant/components/intent/* @home-assistant/core
 homeassistant/components/intesishome/* @jnimmo
 homeassistant/components/ios/* @robbiet480
+homeassistant/components/iotawatt/* @gtdiehl
 homeassistant/components/iperf3/* @rohankapoorcom
 homeassistant/components/ipma/* @dgomes @abmantis
 homeassistant/components/ipp/* @ctalkington
diff --git a/homeassistant/components/iotawatt/__init__.py b/homeassistant/components/iotawatt/__init__.py
new file mode 100644
index 00000000000..7987004e594
--- /dev/null
+++ b/homeassistant/components/iotawatt/__init__.py
@@ -0,0 +1,24 @@
+"""The iotawatt integration."""
+from homeassistant.config_entries import ConfigEntry
+from homeassistant.core import HomeAssistant
+
+from .const import DOMAIN
+from .coordinator import IotawattUpdater
+
+PLATFORMS = ("sensor",)
+
+
+async def async_setup_entry(hass: HomeAssistant, entry: ConfigEntry) -> bool:
+    """Set up iotawatt from a config entry."""
+    coordinator = IotawattUpdater(hass, entry)
+    await coordinator.async_config_entry_first_refresh()
+    hass.data.setdefault(DOMAIN, {})[entry.entry_id] = coordinator
+    hass.config_entries.async_setup_platforms(entry, PLATFORMS)
+    return True
+
+
+async def async_unload_entry(hass: HomeAssistant, entry: ConfigEntry) -> bool:
+    """Unload a config entry."""
+    if unload_ok := await hass.config_entries.async_unload_platforms(entry, PLATFORMS):
+        hass.data[DOMAIN].pop(entry.entry_id)
+    return unload_ok
diff --git a/homeassistant/components/iotawatt/config_flow.py b/homeassistant/components/iotawatt/config_flow.py
new file mode 100644
index 00000000000..9ec860ea76a
--- /dev/null
+++ b/homeassistant/components/iotawatt/config_flow.py
@@ -0,0 +1,107 @@
+"""Config flow for iotawatt integration."""
+from __future__ import annotations
+
+import logging
+
+from iotawattpy.iotawatt import Iotawatt
+import voluptuous as vol
+
+from homeassistant import config_entries, core, exceptions
+from homeassistant.const import CONF_HOST, CONF_PASSWORD, CONF_USERNAME
+from homeassistant.helpers import httpx_client
+
+from .const import CONNECTION_ERRORS, DOMAIN
+
+_LOGGER = logging.getLogger(__name__)
+
+
+async def validate_input(
+    hass: core.HomeAssistant, data: dict[str, str]
+) -> dict[str, str]:
+    """Validate the user input allows us to connect."""
+    iotawatt = Iotawatt(
+        "",
+        data[CONF_HOST],
+        httpx_client.get_async_client(hass),
+        data.get(CONF_USERNAME),
+        data.get(CONF_PASSWORD),
+    )
+    try:
+        is_connected = await iotawatt.connect()
+    except CONNECTION_ERRORS:
+        return {"base": "cannot_connect"}
+    except Exception:  # pylint: disable=broad-except
+        _LOGGER.exception("Unexpected exception")
+        return {"base": "unknown"}
+
+    if not is_connected:
+        return {"base": "invalid_auth"}
+
+    return {}
+
+
+class ConfigFlow(config_entries.ConfigFlow, domain=DOMAIN):
+    """Handle a config flow for iotawatt."""
+
+    VERSION = 1
+
+    def __init__(self):
+        """Initialize."""
+        self._data = {}
+
+    async def async_step_user(self, user_input=None):
+        """Handle the initial step."""
+        if user_input is None:
+            user_input = {}
+
+        schema = vol.Schema(
+            {
+                vol.Required(CONF_HOST, default=user_input.get(CONF_HOST, "")): str,
+            }
+        )
+        if not user_input:
+            return self.async_show_form(step_id="user", data_schema=schema)
+
+        if not (errors := await validate_input(self.hass, user_input)):
+            return self.async_create_entry(title=user_input[CONF_HOST], data=user_input)
+
+        if errors == {"base": "invalid_auth"}:
+            self._data.update(user_input)
+            return await self.async_step_auth()
+
+        return self.async_show_form(step_id="user", data_schema=schema, errors=errors)
+
+    async def async_step_auth(self, user_input=None):
+        """Authenticate user if authentication is enabled on the IoTaWatt device."""
+        if user_input is None:
+            user_input = {}
+
+        data_schema = vol.Schema(
+            {
+                vol.Required(
+                    CONF_USERNAME, default=user_input.get(CONF_USERNAME, "")
+                ): str,
+                vol.Required(
+                    CONF_PASSWORD, default=user_input.get(CONF_PASSWORD, "")
+                ): str,
+            }
+        )
+        if not user_input:
+            return self.async_show_form(step_id="auth", data_schema=data_schema)
+
+        data = {**self._data, **user_input}
+
+        if errors := await validate_input(self.hass, data):
+            return self.async_show_form(
+                step_id="auth", data_schema=data_schema, errors=errors
+            )
+
+        return self.async_create_entry(title=data[CONF_HOST], data=data)
+
+
+class CannotConnect(exceptions.HomeAssistantError):
+    """Error to indicate we cannot connect."""
+
+
+class InvalidAuth(exceptions.HomeAssistantError):
+    """Error to indicate there is invalid auth."""
diff --git a/homeassistant/components/iotawatt/const.py b/homeassistant/components/iotawatt/const.py
new file mode 100644
index 00000000000..db847f3dfe8
--- /dev/null
+++ b/homeassistant/components/iotawatt/const.py
@@ -0,0 +1,12 @@
+"""Constants for the IoTaWatt integration."""
+from __future__ import annotations
+
+import json
+
+import httpx
+
+DOMAIN = "iotawatt"
+VOLT_AMPERE_REACTIVE = "VAR"
+VOLT_AMPERE_REACTIVE_HOURS = "VARh"
+
+CONNECTION_ERRORS = (KeyError, json.JSONDecodeError, httpx.HTTPError)
diff --git a/homeassistant/components/iotawatt/coordinator.py b/homeassistant/components/iotawatt/coordinator.py
new file mode 100644
index 00000000000..1a722d52a1e
--- /dev/null
+++ b/homeassistant/components/iotawatt/coordinator.py
@@ -0,0 +1,56 @@
+"""IoTaWatt DataUpdateCoordinator."""
+from __future__ import annotations
+
+from datetime import timedelta
+import logging
+
+from iotawattpy.iotawatt import Iotawatt
+
+from homeassistant.config_entries import ConfigEntry
+from homeassistant.const import CONF_HOST, CONF_PASSWORD, CONF_USERNAME
+from homeassistant.core import HomeAssistant
+from homeassistant.helpers import httpx_client
+from homeassistant.helpers.update_coordinator import DataUpdateCoordinator, UpdateFailed
+
+from .const import CONNECTION_ERRORS
+
+_LOGGER = logging.getLogger(__name__)
+
+
+class IotawattUpdater(DataUpdateCoordinator):
+    """Class to manage fetching update data from the IoTaWatt Energy Device."""
+
+    api: Iotawatt | None = None
+
+    def __init__(self, hass: HomeAssistant, entry: ConfigEntry) -> None:
+        """Initialize IotaWattUpdater object."""
+        self.entry = entry
+        super().__init__(
+            hass=hass,
+            logger=_LOGGER,
+            name=entry.title,
+            update_interval=timedelta(seconds=30),
+        )
+
+    async def _async_update_data(self):
+        """Fetch sensors from IoTaWatt device."""
+        if self.api is None:
+            api = Iotawatt(
+                self.entry.title,
+                self.entry.data[CONF_HOST],
+                httpx_client.get_async_client(self.hass),
+                self.entry.data.get(CONF_USERNAME),
+                self.entry.data.get(CONF_PASSWORD),
+            )
+            try:
+                is_authenticated = await api.connect()
+            except CONNECTION_ERRORS as err:
+                raise UpdateFailed("Connection failed") from err
+
+            if not is_authenticated:
+                raise UpdateFailed("Authentication error")
+
+            self.api = api
+
+        await self.api.update()
+        return self.api.getSensors()
diff --git a/homeassistant/components/iotawatt/manifest.json b/homeassistant/components/iotawatt/manifest.json
new file mode 100644
index 00000000000..d78e546d71f
--- /dev/null
+++ b/homeassistant/components/iotawatt/manifest.json
@@ -0,0 +1,13 @@
+{
+  "domain": "iotawatt",
+  "name": "IoTaWatt",
+  "config_flow": true,
+  "documentation": "https://www.home-assistant.io/integrations/iotawatt",
+  "requirements": [
+    "iotawattpy==0.0.8"
+  ],
+  "codeowners": [
+    "@gtdiehl"
+  ],
+  "iot_class": "local_polling"
+}
\ No newline at end of file
diff --git a/homeassistant/components/iotawatt/sensor.py b/homeassistant/components/iotawatt/sensor.py
new file mode 100644
index 00000000000..8a8c92a8c51
--- /dev/null
+++ b/homeassistant/components/iotawatt/sensor.py
@@ -0,0 +1,213 @@
+"""Support for IoTaWatt Energy monitor."""
+from __future__ import annotations
+
+from dataclasses import dataclass
+from typing import Callable
+
+from iotawattpy.sensor import Sensor
+
+from homeassistant.components.sensor import (
+    STATE_CLASS_MEASUREMENT,
+    STATE_CLASS_TOTAL_INCREASING,
+    SensorEntity,
+    SensorEntityDescription,
+)
+from homeassistant.const import (
+    DEVICE_CLASS_CURRENT,
+    DEVICE_CLASS_ENERGY,
+    DEVICE_CLASS_POWER,
+    DEVICE_CLASS_POWER_FACTOR,
+    DEVICE_CLASS_VOLTAGE,
+    ELECTRIC_CURRENT_AMPERE,
+    ELECTRIC_POTENTIAL_VOLT,
+    ENERGY_WATT_HOUR,
+    FREQUENCY_HERTZ,
+    PERCENTAGE,
+    POWER_VOLT_AMPERE,
+    POWER_WATT,
+)
+from homeassistant.core import callback
+from homeassistant.helpers import entity, entity_registry, update_coordinator
+from homeassistant.helpers.device_registry import CONNECTION_NETWORK_MAC
+
+from .const import DOMAIN, VOLT_AMPERE_REACTIVE, VOLT_AMPERE_REACTIVE_HOURS
+from .coordinator import IotawattUpdater
+
+
+@dataclass
+class IotaWattSensorEntityDescription(SensorEntityDescription):
+    """Class describing IotaWatt sensor entities."""
+
+    value: Callable | None = None
+
+
+ENTITY_DESCRIPTION_KEY_MAP: dict[str, IotaWattSensorEntityDescription] = {
+    "Amps": IotaWattSensorEntityDescription(
+        "Amps",
+        native_unit_of_measurement=ELECTRIC_CURRENT_AMPERE,
+        state_class=STATE_CLASS_MEASUREMENT,
+        device_class=DEVICE_CLASS_CURRENT,
+    ),
+    "Hz": IotaWattSensorEntityDescription(
+        "Hz",
+        native_unit_of_measurement=FREQUENCY_HERTZ,
+        state_class=STATE_CLASS_MEASUREMENT,
+        icon="mdi:flash",
+    ),
+    "PF": IotaWattSensorEntityDescription(
+        "PF",
+        native_unit_of_measurement=PERCENTAGE,
+        state_class=STATE_CLASS_MEASUREMENT,
+        device_class=DEVICE_CLASS_POWER_FACTOR,
+        value=lambda value: value * 100,
+    ),
+    "Watts": IotaWattSensorEntityDescription(
+        "Watts",
+        native_unit_of_measurement=POWER_WATT,
+        state_class=STATE_CLASS_MEASUREMENT,
+        device_class=DEVICE_CLASS_POWER,
+    ),
+    "WattHours": IotaWattSensorEntityDescription(
+        "WattHours",
+        native_unit_of_measurement=ENERGY_WATT_HOUR,
+        state_class=STATE_CLASS_TOTAL_INCREASING,
+        device_class=DEVICE_CLASS_ENERGY,
+    ),
+    "VA": IotaWattSensorEntityDescription(
+        "VA",
+        native_unit_of_measurement=POWER_VOLT_AMPERE,
+        state_class=STATE_CLASS_MEASUREMENT,
+        icon="mdi:flash",
+    ),
+    "VAR": IotaWattSensorEntityDescription(
+        "VAR",
+        native_unit_of_measurement=VOLT_AMPERE_REACTIVE,
+        state_class=STATE_CLASS_MEASUREMENT,
+        icon="mdi:flash",
+    ),
+    "VARh": IotaWattSensorEntityDescription(
+        "VARh",
+        native_unit_of_measurement=VOLT_AMPERE_REACTIVE_HOURS,
+        state_class=STATE_CLASS_MEASUREMENT,
+        icon="mdi:flash",
+    ),
+    "Volts": IotaWattSensorEntityDescription(
+        "Volts",
+        native_unit_of_measurement=ELECTRIC_POTENTIAL_VOLT,
+        state_class=STATE_CLASS_MEASUREMENT,
+        device_class=DEVICE_CLASS_VOLTAGE,
+    ),
+}
+
+
+async def async_setup_entry(hass, config_entry, async_add_entities):
+    """Add sensors for passed config_entry in HA."""
+    coordinator: IotawattUpdater = hass.data[DOMAIN][config_entry.entry_id]
+    created = set()
+
+    @callback
+    def _create_entity(key: str) -> IotaWattSensor:
+        """Create a sensor entity."""
+        created.add(key)
+        return IotaWattSensor(
+            coordinator=coordinator,
+            key=key,
+            mac_address=coordinator.data["sensors"][key].hub_mac_address,
+            name=coordinator.data["sensors"][key].getName(),
+            entity_description=ENTITY_DESCRIPTION_KEY_MAP.get(
+                coordinator.data["sensors"][key].getUnit(),
+                IotaWattSensorEntityDescription("base_sensor"),
+            ),
+        )
+
+    async_add_entities(_create_entity(key) for key in coordinator.data["sensors"])
+
+    @callback
+    def new_data_received():
+        """Check for new sensors."""
+        entities = [
+            _create_entity(key)
+            for key in coordinator.data["sensors"]
+            if key not in created
+        ]
+        if entities:
+            async_add_entities(entities)
+
+    coordinator.async_add_listener(new_data_received)
+
+
+class IotaWattSensor(update_coordinator.CoordinatorEntity, SensorEntity):
+    """Defines a IoTaWatt Energy Sensor."""
+
+    entity_description: IotaWattSensorEntityDescription
+    _attr_force_update = True
+
+    def __init__(
+        self,
+        coordinator,
+        key,
+        mac_address,
+        name,
+        entity_description: IotaWattSensorEntityDescription,
+    ):
+        """Initialize the sensor."""
+        super().__init__(coordinator=coordinator)
+
+        self._key = key
+        data = self._sensor_data
+        if data.getType() == "Input":
+            self._attr_unique_id = (
+                f"{data.hub_mac_address}-input-{data.getChannel()}-{data.getUnit()}"
+            )
+        self.entity_description = entity_description
+
+    @property
+    def _sensor_data(self) -> Sensor:
+        """Return sensor data."""
+        return self.coordinator.data["sensors"][self._key]
+
+    @property
+    def name(self) -> str | None:
+        """Return name of the entity."""
+        return self._sensor_data.getName()
+
+    @property
+    def device_info(self) -> entity.DeviceInfo | None:
+        """Return device info."""
+        return {
+            "connections": {
+                (CONNECTION_NETWORK_MAC, self._sensor_data.hub_mac_address)
+            },
+            "manufacturer": "IoTaWatt",
+            "model": "IoTaWatt",
+        }
+
+    @callback
+    def _handle_coordinator_update(self) -> None:
+        """Handle updated data from the coordinator."""
+        if self._key not in self.coordinator.data["sensors"]:
+            if self._attr_unique_id:
+                entity_registry.async_get(self.hass).async_remove(self.entity_id)
+            else:
+                self.hass.async_create_task(self.async_remove())
+            return
+
+        super()._handle_coordinator_update()
+
+    @property
+    def extra_state_attributes(self):
+        """Return the extra state attributes of the entity."""
+        data = self._sensor_data
+        attrs = {"type": data.getType()}
+        if attrs["type"] == "Input":
+            attrs["channel"] = data.getChannel()
+
+        return attrs
+
+    @property
+    def native_value(self) -> entity.StateType:
+        """Return the state of the sensor."""
+        if func := self.entity_description.value:
+            return func(self._sensor_data.getValue())
+
+        return self._sensor_data.getValue()
diff --git a/homeassistant/components/iotawatt/strings.json b/homeassistant/components/iotawatt/strings.json
new file mode 100644
index 00000000000..f21dfe0cd09
--- /dev/null
+++ b/homeassistant/components/iotawatt/strings.json
@@ -0,0 +1,23 @@
+{
+  "config": {
+    "step": {
+      "user": {
+        "data": {
+          "host": "[%key:common::config_flow::data::host%]"
+        }
+      },
+      "auth": {
+        "data": {
+          "username": "[%key:common::config_flow::data::username%]",
+          "password": "[%key:common::config_flow::data::password%]"
+        },
+        "description": "The IoTawatt device requires authentication. Please enter the username and password and click the Submit button."
+      }
+    },
+    "error": {
+      "cannot_connect": "[%key:common::config_flow::error::cannot_connect%]",
+      "invalid_auth": "[%key:common::config_flow::error::invalid_auth%]",
+      "unknown": "[%key:common::config_flow::error::unknown%]"
+    }
+  }
+}
diff --git a/homeassistant/components/iotawatt/translations/en.json b/homeassistant/components/iotawatt/translations/en.json
new file mode 100644
index 00000000000..cbda4b41bea
--- /dev/null
+++ b/homeassistant/components/iotawatt/translations/en.json
@@ -0,0 +1,24 @@
+{
+    "config": {
+        "error": {
+            "cannot_connect": "Failed to connect",
+            "invalid_auth": "Invalid authentication",
+            "unknown": "Unexpected error"
+        },
+        "step": {
+            "auth": {
+                "data": {
+                    "password": "Password",
+                    "username": "Username"
+                },
+                "description": "The IoTawatt device requires authentication. Please enter the username and password and click the Submit button."
+            },
+            "user": {
+                "data": {
+                    "host": "Host"
+                }
+            }
+        }
+    },
+    "title": "iotawatt"
+}
\ No newline at end of file
diff --git a/homeassistant/generated/config_flows.py b/homeassistant/generated/config_flows.py
index ec2947443de..2eb4e43fe32 100644
--- a/homeassistant/generated/config_flows.py
+++ b/homeassistant/generated/config_flows.py
@@ -130,6 +130,7 @@ FLOWS = [
     "ifttt",
     "insteon",
     "ios",
+    "iotawatt",
     "ipma",
     "ipp",
     "iqvia",
diff --git a/requirements_all.txt b/requirements_all.txt
index bcd80654764..209d9c78696 100644
--- a/requirements_all.txt
+++ b/requirements_all.txt
@@ -864,6 +864,9 @@ influxdb-client==1.14.0
 # homeassistant.components.influxdb
 influxdb==5.2.3
 
+# homeassistant.components.iotawatt
+iotawattpy==0.0.8
+
 # homeassistant.components.iperf3
 iperf3==0.1.11
 
diff --git a/requirements_test_all.txt b/requirements_test_all.txt
index 8ea844b7d57..36b928d23c5 100644
--- a/requirements_test_all.txt
+++ b/requirements_test_all.txt
@@ -504,6 +504,9 @@ influxdb-client==1.14.0
 # homeassistant.components.influxdb
 influxdb==5.2.3
 
+# homeassistant.components.iotawatt
+iotawattpy==0.0.8
+
 # homeassistant.components.gogogate2
 ismartgate==4.0.0
 
diff --git a/tests/components/iotawatt/__init__.py b/tests/components/iotawatt/__init__.py
new file mode 100644
index 00000000000..3d1afe1b88b
--- /dev/null
+++ b/tests/components/iotawatt/__init__.py
@@ -0,0 +1,21 @@
+"""Tests for the IoTaWatt integration."""
+from iotawattpy.sensor import Sensor
+
+INPUT_SENSOR = Sensor(
+    channel="1",
+    name="My Sensor",
+    io_type="Input",
+    unit="WattHours",
+    value="23",
+    begin="",
+    mac_addr="mock-mac",
+)
+OUTPUT_SENSOR = Sensor(
+    channel="N/A",
+    name="My WattHour Sensor",
+    io_type="Output",
+    unit="WattHours",
+    value="243",
+    begin="",
+    mac_addr="mock-mac",
+)
diff --git a/tests/components/iotawatt/conftest.py b/tests/components/iotawatt/conftest.py
new file mode 100644
index 00000000000..f96201ba50e
--- /dev/null
+++ b/tests/components/iotawatt/conftest.py
@@ -0,0 +1,27 @@
+"""Test fixtures for IoTaWatt."""
+from unittest.mock import AsyncMock, patch
+
+import pytest
+
+from homeassistant.components.iotawatt import DOMAIN
+
+from tests.common import MockConfigEntry
+
+
+@pytest.fixture
+def entry(hass):
+    """Mock config entry added to HA."""
+    entry = MockConfigEntry(domain=DOMAIN, data={"host": "1.2.3.4"})
+    entry.add_to_hass(hass)
+    return entry
+
+
+@pytest.fixture
+def mock_iotawatt(entry):
+    """Mock iotawatt."""
+    with patch("homeassistant.components.iotawatt.coordinator.Iotawatt") as mock:
+        instance = mock.return_value
+        instance.connect = AsyncMock(return_value=True)
+        instance.update = AsyncMock()
+        instance.getSensors.return_value = {"sensors": {}}
+        yield instance
diff --git a/tests/components/iotawatt/test_config_flow.py b/tests/components/iotawatt/test_config_flow.py
new file mode 100644
index 00000000000..e028f365431
--- /dev/null
+++ b/tests/components/iotawatt/test_config_flow.py
@@ -0,0 +1,143 @@
+"""Test the IoTawatt config flow."""
+from unittest.mock import patch
+
+import httpx
+
+from homeassistant import config_entries, setup
+from homeassistant.components.iotawatt.const import DOMAIN
+from homeassistant.core import HomeAssistant
+from homeassistant.data_entry_flow import RESULT_TYPE_CREATE_ENTRY, RESULT_TYPE_FORM
+
+
+async def test_form(hass: HomeAssistant) -> None:
+    """Test we get the form."""
+    await setup.async_setup_component(hass, "persistent_notification", {})
+    result = await hass.config_entries.flow.async_init(
+        DOMAIN, context={"source": config_entries.SOURCE_USER}
+    )
+    assert result["type"] == RESULT_TYPE_FORM
+    assert result["step_id"] == config_entries.SOURCE_USER
+
+    with patch(
+        "homeassistant.components.iotawatt.async_setup_entry",
+        return_value=True,
+    ), patch(
+        "homeassistant.components.iotawatt.config_flow.Iotawatt.connect",
+        return_value=True,
+    ) as mock_setup_entry:
+        result2 = await hass.config_entries.flow.async_configure(
+            result["flow_id"],
+            {
+                "host": "1.1.1.1",
+            },
+        )
+        await hass.async_block_till_done()
+
+    assert len(mock_setup_entry.mock_calls) == 1
+    assert result2["type"] == RESULT_TYPE_CREATE_ENTRY
+    assert result2["data"] == {
+        "host": "1.1.1.1",
+    }
+
+
+async def test_form_auth(hass: HomeAssistant) -> None:
+    """Test we handle auth."""
+
+    await setup.async_setup_component(hass, "persistent_notification", {})
+    result = await hass.config_entries.flow.async_init(
+        DOMAIN, context={"source": config_entries.SOURCE_USER}
+    )
+    assert result["type"] == RESULT_TYPE_FORM
+    assert result["step_id"] == "user"
+
+    with patch(
+        "homeassistant.components.iotawatt.config_flow.Iotawatt.connect",
+        return_value=False,
+    ):
+        result2 = await hass.config_entries.flow.async_configure(
+            result["flow_id"],
+            {"host": "1.1.1.1"},
+        )
+        await hass.async_block_till_done()
+
+    assert result2["type"] == RESULT_TYPE_FORM
+    assert result2["step_id"] == "auth"
+
+    with patch(
+        "homeassistant.components.iotawatt.config_flow.Iotawatt.connect",
+        return_value=False,
+    ):
+        result3 = await hass.config_entries.flow.async_configure(
+            result["flow_id"],
+            {
+                "username": "mock-user",
+                "password": "mock-pass",
+            },
+        )
+        await hass.async_block_till_done()
+
+    assert result3["type"] == RESULT_TYPE_FORM
+    assert result3["step_id"] == "auth"
+    assert result3["errors"] == {"base": "invalid_auth"}
+
+    with patch(
+        "homeassistant.components.iotawatt.async_setup_entry",
+        return_value=True,
+    ) as mock_setup_entry, patch(
+        "homeassistant.components.iotawatt.config_flow.Iotawatt.connect",
+        return_value=True,
+    ):
+        result4 = await hass.config_entries.flow.async_configure(
+            result["flow_id"],
+            {
+                "username": "mock-user",
+                "password": "mock-pass",
+            },
+        )
+        await hass.async_block_till_done()
+
+    assert result4["type"] == RESULT_TYPE_CREATE_ENTRY
+    assert len(mock_setup_entry.mock_calls) == 1
+    assert result4["data"] == {
+        "host": "1.1.1.1",
+        "username": "mock-user",
+        "password": "mock-pass",
+    }
+
+
+async def test_form_cannot_connect(hass: HomeAssistant) -> None:
+    """Test we handle cannot connect error."""
+    result = await hass.config_entries.flow.async_init(
+        DOMAIN, context={"source": config_entries.SOURCE_USER}
+    )
+
+    with patch(
+        "homeassistant.components.iotawatt.config_flow.Iotawatt.connect",
+        side_effect=httpx.HTTPError("any"),
+    ):
+        result2 = await hass.config_entries.flow.async_configure(
+            result["flow_id"],
+            {"host": "1.1.1.1"},
+        )
+
+    assert result2["type"] == RESULT_TYPE_FORM
+    assert result2["errors"] == {"base": "cannot_connect"}
+
+
+async def test_form_setup_exception(hass: HomeAssistant) -> None:
+    """Test we handle broad exception."""
+    result = await hass.config_entries.flow.async_init(
+        DOMAIN, context={"source": config_entries.SOURCE_USER}
+    )
+
+    with patch(
+        "homeassistant.components.iotawatt.config_flow.Iotawatt.connect",
+        side_effect=Exception,
+    ):
+        result2 = await hass.config_entries.flow.async_configure(
+            result["flow_id"],
+            {"host": "1.1.1.1"},
+        )
+
+    assert result2["type"] == RESULT_TYPE_FORM
+    assert result2["errors"] == {"base": "unknown"}
diff --git a/tests/components/iotawatt/test_init.py b/tests/components/iotawatt/test_init.py
new file mode 100644
index 00000000000..b43a3d9aa88
--- /dev/null
+++ b/tests/components/iotawatt/test_init.py
@@ -0,0 +1,31 @@
+"""Test init."""
+import httpx
+
+from homeassistant.config_entries import ConfigEntryState
+from homeassistant.setup import async_setup_component
+
+from . import INPUT_SENSOR
+
+
+async def test_setup_unload(hass, mock_iotawatt, entry):
+    """Test we can setup and unload an entry."""
+    mock_iotawatt.getSensors.return_value["sensors"]["my_sensor_key"] = INPUT_SENSOR
+    assert await async_setup_component(hass, "iotawatt", {})
+    await hass.async_block_till_done()
+    assert await hass.config_entries.async_unload(entry.entry_id)
+
+
+async def test_setup_connection_failed(hass, mock_iotawatt, entry):
+    """Test connection error during startup."""
+    mock_iotawatt.connect.side_effect = httpx.ConnectError("")
+    assert await async_setup_component(hass, "iotawatt", {})
+    await hass.async_block_till_done()
+    assert entry.state == ConfigEntryState.SETUP_RETRY
+
+
+async def test_setup_auth_failed(hass, mock_iotawatt, entry):
+    """Test auth error during startup."""
+    mock_iotawatt.connect.return_value = False
+    assert await async_setup_component(hass, "iotawatt", {})
+    await hass.async_block_till_done()
+    assert entry.state == ConfigEntryState.SETUP_RETRY
diff --git a/tests/components/iotawatt/test_sensor.py b/tests/components/iotawatt/test_sensor.py
new file mode 100644
index 00000000000..556da8cc2b0
--- /dev/null
+++ b/tests/components/iotawatt/test_sensor.py
@@ -0,0 +1,76 @@
+"""Test setting up sensors."""
+from datetime import timedelta
+
+from homeassistant.components.sensor import (
+    ATTR_STATE_CLASS,
+    DEVICE_CLASS_ENERGY,
+    STATE_CLASS_TOTAL_INCREASING,
+)
+from homeassistant.const import (
+    ATTR_DEVICE_CLASS,
+    ATTR_FRIENDLY_NAME,
+    ATTR_UNIT_OF_MEASUREMENT,
+    ENERGY_WATT_HOUR,
+)
+from homeassistant.setup import async_setup_component
+from homeassistant.util.dt import utcnow
+
+from . import INPUT_SENSOR, OUTPUT_SENSOR
+
+from tests.common import async_fire_time_changed
+
+
+async def test_sensor_type_input(hass, mock_iotawatt):
+    """Test input sensors work."""
+    assert await async_setup_component(hass, "iotawatt", {})
+    await hass.async_block_till_done()
+
+    assert len(hass.states.async_entity_ids()) == 0
+
+    # Discover this sensor during a regular update.
+    mock_iotawatt.getSensors.return_value["sensors"]["my_sensor_key"] = INPUT_SENSOR
+    async_fire_time_changed(hass, utcnow() + timedelta(seconds=30))
+    await hass.async_block_till_done()
+
+    assert len(hass.states.async_entity_ids()) == 1
+
+    state = hass.states.get("sensor.my_sensor")
+    assert state is not None
+    assert state.state == "23"
+    assert state.attributes[ATTR_STATE_CLASS] == STATE_CLASS_TOTAL_INCREASING
+    assert state.attributes[ATTR_FRIENDLY_NAME] == "My Sensor"
+    assert state.attributes[ATTR_UNIT_OF_MEASUREMENT] == ENERGY_WATT_HOUR
+    assert state.attributes[ATTR_DEVICE_CLASS] == DEVICE_CLASS_ENERGY
+    assert state.attributes["channel"] == "1"
+    assert state.attributes["type"] == "Input"
+
+    mock_iotawatt.getSensors.return_value["sensors"].pop("my_sensor_key")
+    async_fire_time_changed(hass, utcnow() + timedelta(seconds=30))
+    await hass.async_block_till_done()
+
+    assert hass.states.get("sensor.my_sensor") is None
+
+
+async def test_sensor_type_output(hass, mock_iotawatt):
+    """Tests the sensor type of Output."""
+    mock_iotawatt.getSensors.return_value["sensors"][
+        "my_watthour_sensor_key"
+    ] = OUTPUT_SENSOR
+    assert await async_setup_component(hass, "iotawatt", {})
+    await hass.async_block_till_done()
+
+    assert len(hass.states.async_entity_ids()) == 1
+
+    state = hass.states.get("sensor.my_watthour_sensor")
+    assert state is not None
+    assert state.state == "243"
+    assert state.attributes[ATTR_FRIENDLY_NAME] == "My WattHour Sensor"
+    assert state.attributes[ATTR_UNIT_OF_MEASUREMENT] == ENERGY_WATT_HOUR
+    assert state.attributes[ATTR_DEVICE_CLASS] == DEVICE_CLASS_ENERGY
+    assert state.attributes["type"] == "Output"
+
+    mock_iotawatt.getSensors.return_value["sensors"].pop("my_watthour_sensor_key")
+    async_fire_time_changed(hass, utcnow() + timedelta(seconds=30))
+    await hass.async_block_till_done()
+
+    assert hass.states.get("sensor.my_watthour_sensor") is None