The government has given the green light to a scheme which will see smart meters being installed into all of the UK’s 26 million homes. Although touted for some time, the approved plan will see British Gas and other energy suppliers given responsibility for installing the meters, which will allow consumers to monitor their own energy use, as well as allow the energy companies to read consumption levels remotely.

The ability to read meters remotely will forego the use of estimated bills, while the consumers’ ability to monitor their gas and electricity usage will help in their efforts to adopt a greener lifestyle.

But the estimated £8.5bn outlay threatened to usurp the announcement, with critics warning that energy companies may pocket the benefits rather than passing them back to the consumer by way of cheaper fuel. The Department of Energy and Climate change believes the expected savings to be in the region of £14.5bn – dwarfing the outlay costs – due to reduced administrative costs.

While the plans were welcomed by power companies and industry bodies, consumer groups and energy consultants voiced concerns that the smart meter rollout was being placed into the hands of a sector that had already come in for fierce criticism over high charges, and allegedly not passing on previous benefits to customers.

“We’re concerned that consumers could be saddled with the entire multibillion pound bill for a project that’s going to save the industry hundreds of millions of pounds a year,” said Martyn Hocking, editor of Which? magazine.

British Gas, however, believe that the government estimate of 2% saving on energy per household was conservative and the actual saving could be considerably higher after research in the United States suggested that customers’ energy use could be cut by as much as 20% by using smart metering technology.

The company also believes the roll-out of smart meters could create up to 2,600 additional jobs by 2012.

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