Contracts have been signed with EOF Energy, E.ON UK, Scottish and Southern Energy, and Scottish Power to conduct the trials of smart meters and associated feedback devices. They are being funded by £10 million from Government matched by a similar amount from the companies involved. The funding was announced as part of Budget 2006.

The trials will include 15,000 households receiving state of the art smart meters and 8,000 more receiving clip on real time display units for their existing meters. The other households in the trial will be testing new ways of receiving information to help them cut their energy use. Altogether around 40,000 households will be involved.

Clip on real time display units can tell people how much energy they are using, and how much it is costing when individual appliances are turned on. Smart meters allow energy suppliers to communicate directly with their customers, removing the need for meter-readings and ensuring entirely accurate bills with no estimates. Smart meters tell people about their energy use either through linked display units or in other ways, such as through the internet or the television.

The trials will test out consumers' response to better information on their energy use through a variety of methods, including:

Consumers to be able to access information about their consumption and energy costs through visual display units that can be displayed round the house, over the internet and even through digital TV;

The potential for energy suppliers to provide enhanced billing information with advice to consumers on how they can cut down their energy bills; and,

Providing a breakdown of energy use to the customer and exploring a range of tariffs for consumption at different times of the day.

The trials will be conducted throughout the country and will look at the responses from a range of customers, including those in fuel poverty.

The trials will also look at:

Increasing the frequency of billing as well as the impact of more accurate bills; and

Encouragement to become even more energy efficient through more information and community engagement.

Smart meters are expected to be rolled out to most households within the next 10 years, and all but the smallest businesses in the next five years.

In the meantime, Government have proposed that real time display units be provided with any new meters fitted from 2008, and to all households that request them between 2008 and 2010. It is estimated that these short-term measures will deliver savings of 0.3 million tones of carbon per year by 2020. Government will be consulting further on the implementation of these proposals.