The government wants every house in the U.K. to have a smart meter installed by the year 2020.

British Gas was amongst many energy companies that welcomed the initiative, as it allows them to not only remotely record the energy they are using (doing away with physical meter reading), but also let their customers see accurately how much energy they are consuming.

The cost of the initiative will be some £7 billion, as around 22 million gas meters are needed and 26 million electricity meters.

Smart meters will not only save a fortune spent on actually reading meters, but they should also reduce the amount of mistakes and controversial estimated readings. Consumer groups hope that many of the savings will be passed onto customers.

And because consumers will for the first time see the cost of heating their home, or cooking, they will begin to conserve energy and this will help reduce carbon emissions.

The meter fitting project will be the biggest of its kind since British Gas undertook to convert 17 million properties to natural gas in the 1970s.

It will be the energy company’s responsibility to run the meter fitting programme and estimates reckon the £7 billion total cost equates to around £15 per home, per year, for the five years between 2010 and 2020.

Of that £15 cost a year for five years, some £10 will be recouped in direct cost savings from the energy suppliers, leaving £5. But, with hoped for energy use savings of around 2.5% on average, this would mean some £30 off the average bill. The net result is customers better off by about £20 a year.

Overall, this could cut around £100 million of bills by 2020 and see a dramatic reduction in carbon dioxide emissions of nearly three million tonnes.

Guest Article by Neil Camp