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Smart Grid is a new type of power grid that will provide reliable, secure, and efficient energy transmission and distribution. Cyber attacks against data readmission system threaten the security of smart grid. Hence, identifying and preventing the false data injection as early as possible becomes a critical issue. However, there is no existing solution that considers all aspects such as deployment cost and system efficiency. In this paper, we apply a light-weight watermarking technique to defend against false data injection attacks. To be specific, we add a secure watermark to real-time meter readings and transmit the watermarked data through high speed unsecured network. The utility can then correlate the watermarked data with the original watermark to detect the presence of false data injected by adversary. Our simulation results show that watermarking technique can effectively detect any false manipulation to the watermarked data at low cost.