Every family in the country could have an energy smart meter within the next decade, the government said today.

Some 26m electricity and 22m gas meters will be fitted at a cost of £7bn, which will be picked up by the energy giants.

Commentators said it was inevitable this cost would be passed on to consumers, however, with industry sources saying it was the equivalent of £15 per household per year between 2010 and 2020 – or £150 in total.

After the initial cost, a typical family could save up to 15 per cent a year, or £187 off their annual bill, according to figures from Uswitch.com, the comparison site.

Smart meters monitor your household’s energy consumption and send the information back to your energy supplier, so it dispenses with the need for meter readings.

The meters also have a small screen allowing households to monitor their own usage, and cut back if their consumption is too high.

Tom Lyon, energy expert at Uswitch.com said: “Today’s announcement from the government to equip every home in the UK with a smart meter by 2020 marks 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.

“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.”

Uswitch said that, on average, customers owed £142 as a result of estimated readings, with a fifth owing between £101-£200.

Scott Byrom, utilities manager Moneysupermarket.com, another comparison site, said: “Not only will this put an end to estimated bills and meter readings, but it will enable consumers to keep a close eye on their energy consumption, allowing them to curb unnecessary usage, use energy at off-peak times and hopefully, make some much needed savings.”

Many families have never switched their energy supplier, but comparison sites said they could save hundreds of pounds a year by doing so. The biggest savings are available to those who switch to dual-fuel deals, pay by direct debit rather than quarterly cheque, and who are prepared to accept paperless billing.

Uswitch’s estimate of the savings available by using a smart meter were based on a medium user with dual fuel, currently paying £1,245 a year.

First Utility, a smaller supplier, has already installed smart meters in the homes of its 10,000 customers. Its chief executive Mark Daeche said the lower running costs allow it to offer competitive prices.