Smart meters could save £40m on energy - 4 August

Businesses could save more than £40m a year in energy bills if plans to install "smart meters" in all except the smallest companies go ahead, according to government proposals.

In the latest consultation document as part of a review of energy needs, ministers are proposing that suppliers should extend to most businesses sophisticated smart metering within five years.

Smart meters send information about energy use directly to energy suppliers to ensure more accurate billing, The aim is to cut gas and electricity bills, improving energy efficiency and reducing carbon emissions.

Homeowners are expected to be included in the roll-out of technology that will allow users to see "real time" digital displays of their energy consumption. From May 2008, for two years, the government wants households to have displays installed free. The document said data could be transmitted to televisions, mobile phones or personal computers. Some 40,000 homes will be included in domestic trials of smart meters.

But the Conservatives said the proposals were timid: "The government is supporting the limited clip-on visual electricity display. Rather than helping improve home energy efficiency, this pulls the rug from under the real smart meter market."

With oil and gas prices rising and expected to stay high, efforts to cut energy use will form a plank of policy over coming decades. As well as building nuclear plants to reduce dependence on imported gas, ministers want to encourage greater efficiency. Smart meters have been championed by environmentalists, but opponents highlight their high cost and the fact there is not a standard technology accepted by the industry.

As promoting energy efficiency and fighting climate change have become mainstream political aims, the government and energy companies are making more aggressive noises about installing them. "Cutting carbon emissions is one of the greatest challenges we face," said Malcolm Wicks, energy minister. "It is vital that we make best use of this emerging technology."