Smart meters enable meter readings to be taken remotely and, together with a display device, give householders real-time information on their energy use.
The new information smart meters provide will help consumers to see the amount of energy they are using and how to save money on bills.
Smart meters will mean the end of estimated bills, no more having to stay in for home readings, quicker and smoother switching between suppliers and cheaper, easier prepayment.
Energy and Climate Change Secretary Ed Miliband said: "This is another part of our Great British refurb. The meters most of us have in our homes were designed for a different age, before climate change. Now we need to get smarter with our energy.
"Smart meters will empower all consumers to monitor their own energy use and make reductions in energy consumption and carbon emissions as a result. Smart meters will also mean the end of inaccurate bills and estimated meter readings.
"This is a big project affecting 26 million homes, and several million businesses, so it’s important we design a system that brings best value to everyone involved."
Karen Gibson, a 33-year-old nursery manager from Northumberland, is an npower customer who had a "smart pre-payment meter" fitted in October 2007.
"This new smart meter has made life so much easier," she said.
"I believe everyone should have one and the sooner the better.
"I reckon I have saved around £250 since I had it fitted a couple of years ago because I am not wasting as much energy as before. I know at any given moment how much energy I am using in pounds and pence and I pay for exactly what I use.
"An added bonus is that I don’t need to pop out constantly to top up my key. And if the shop is shut I don’t need to worry as I prefer to use the internet to top up my meter. If I have a problem with my computer I can simply use my mobile phone. All the fuss has now been taken away with having a pre-payment meter."
Tom Lyon, energy expert at uSwitch.com said the roll-out of energy smart meters marked a great news day for all energy users.
"It may seem like a long deadline, but this is a huge programme and it’s important that it’s completed as effectively as possible, with minimum disruption to consumers.
"Smart meters will provide consumers with the information they need to manage their use of energy and reduce costs. At last, it will also mark the end of meter readings and estimated bills.
"Our research has shown that almost 11 million consumers have unexpectedly owed money to their supplier following a discrepancy between an estimated and actual meter reading. On average, these customers ended up owing £142, with a fifth (20%) owing between £101-£200.
"The initiative will also provide a more efficient method of balancing the supply and demand of electricity across Great Britain. In turn, this will reduce costs and carbon emissions.
"We may all have to pay a little more to cover the installation costs of smart meters, but this expense will be quickly wiped out by future savings."
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