Smart meters will be installed in all UK homes by 2020, in an effort to save customers money and help fight climate change.

By 2020, every household in the country will have a smart meter that will measure energy consumption and report results back to their utility providers – signalling an end to estimated and inaccurate bills, according to the Department for Energy and Climate Change (DECC).

Energy suppliers will be made responsible for installing the meters in their customers’ homes, in a technology development scheme that will overall cost around £6 million.

A smart meter is a standalone display device that enables consumers to see and understand their energy use and carbon emissions in real time, rather than wait for an estimated bill from their utilities company.

Lord Hunt, Energy and Climate Change Minister, said: “Smart meters will put the power in people’s hands, enabling us all to control how much energy we use, cut emissions and cut bills. Smart grids will help manage the massive shift to low carbon electricity such as wind, nuclear and clean fossil fuels.

“Globally the business of developing smart grids has been estimated at £27 billion over the next 5 years and the UK has the know-how to be part of that.”

Smart meters are also useful for measuring carbon emissions and will be used in the fight against climate change. The DECC has estimated that the meters could save around 15 million tonnes of CO2 over a 20-year period – vital in helping the environment as UK households are reportedly responsible for 26% of the country’s energy use and CO2 emissions, some of which are due to “inefficient use of energy”.

The main aim of the meters is to make people more aware of the energy they use. This will not only benefit themselves – for example, they can see that it is cheaper for them to use electricity at night – but also the environment – more than £900 million is wasted every year by leaving electrical equipment on standby.

By 2020, there will be around 50 million smart meters in 26 million homes across the country, and also in most small businesses.