The government is to unveil smart meters by the end of 2020

The government is to unveil plans for every home in the UK to be equipped with smart meters by the end of 2020

Smart meters allow suppliers to remotely record customers' gas and electricity use, and let consumers see how much energy they are using.

Some 26 million electricity and 22 million gas meters will need to be fitted at a cost of £7bn.

Smart meters end the need to dispatch meter readers, meaning huge savings for energy firms who hope bills will fall.

It is also hoped that smart meters will mean an end to estimated bills and call centre staff who deal with related complaints.

British Gas said the move would reduce the UK's energy use, cut carbon emissions and save customers money.

Cost savings

Energy providers will have the responsibility to fit the meters in what amounts to the biggest programme of work since British Gas converted appliances in 17 million homes to natural gas back in the 1970s.

Industry sources say that the £7bn cost amounts to around £15 per household per year between 2010 and 2020.

I've managed to save about a tenth, both on energy and gas, since having the smart meter because its made me conscious of the energy I'm using Smart reader user Lloyd Matthews

But £10 of that will be accounted for in cost savings by the suppliers. That leaves the customer picking up the other £5.

But the average consumer is also likely to save 2% to 3% off their energy use each year, and thus cut £25 to £35 off their bills.

So overall, households could be better off to the tune of more than £20 a year.

The government believes we could all save around 2% off energy use. That would cut £100m from our bills by 2020. It could also reduce our C02 emissions by 2.6m tonnes.

A new industry-backed Central Communications body will be established to handle all the meter reading data.

'Benefit'

One of the smaller energy companies, First Utility, has already installed smart meters in the homes of its 10,000 customers.

The firm's chief executive Mark Daeche says the lower running costs allows the company to offer competitive prices.

"Of course it is a benefit to us," he said.

"We can provide lower prices as we don't have the overheads of supporting a customer with lots of customer service."

Lloyd Matthews and his wife Sussanna live in East London. They are EDF customers and they have been using a smart meter for the past two years.

The meter comes with a display unit that shows Mr Matthews exactly how much electricity and gas he is using. He can also compare his energy use on a daily, weekly or monthly basis.

Mr Matthews says that knowledge has enabled him to reduce his energy bills without hampering his lifestyle

"I've managed to save about a tenth, both on energy and gas since having the smart meter, because its made me conscious of the energy I'm using," he said.

The government is to launch a three-month consultation process on the plans.

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