Rolling out “smart” meters to all homes and businesses in Britain will save the average consumer £23 a year on their energy bills by 2020, the government has said.
The meters show homeowners how much gas and electricity they are using to help them save money and cut carbon emissions and can be read remotely by suppliers. They will also mean an end to estimated billing.
They will also pave the way for “smart grids” in the future which will be able to manage supplies more efficiently, for example by automatically turning appliances on and off to reduce demand or make the most of intermittent wind power.
The £11bn roll-out of 53M gas and electricity smart meters will get under way by 2014 and be completed by 2019, the Department of Energy and Climate Change (DECC) said as it published its plans for the scheme.
Householders will pay for the cost of the meters through their bills, although no one-off or upfront charges will be permitted for installing the meters.
According to DECC, the scheme would save people £6bn, cut costs to suppliers by around £11bn which it said should be passed onto customers, and save the UK £1.5bn thanks to reductions in greenhouse gases.
A net benefit of £7.3bn would be seen over the next 20 years, officials said.
Consumers would save money on their bills because they would be able to see in real time how much energy they are using and what the tariffs are. Smart meters are also expected to make switching suppliers easier.
And because energy companies will have more accurate data for billing customers, they will be able to reduce their costs by ending home meter reading and reducing the number of calls to call centres.