A gadget to monitor household energy use is to be given free to every home that wants one.

The move is intended to make households think about the amount of energy they waste and for them to learn new habits such as switching off lights and turning off TVs and computers at the wall.

Energy companies are to supply the visual display units, which can show “real-time” energy use, to any customer who asks for them for a two-year period from next year.

They must also supply them to every new home and whenever a meter is being replaced.

Ministers believe that consumers will soon economise on energy when they realise the amount of money they are wasting on unnecessary energy use that leads to higher bills.

A control is attached to a household meter and the consumer uses the display unit to test the electricity use of each appliance in the house – from games console to table lamp and washing machine.

The main government goal is for every home to have a “smart meter” for gas and electricity installed within ten years.

These meters cost about £250 to install today but if there is a nationwide take-up the price is expected to drop to about £150. Companies will be expected to pick up the cost of these meters but some industry figures believe that higher energy bills are inevitable.

The advantage of the smart meters, however, is that they show the amount of energy being used in a home at any one time. It might also encourage utility companies to introduce discount prices for energy use in off-peak hours. The meters can be read remotely, so bills are more accurate.

Alistair Darling, the Trade and Industry Secretary, made clear in yesterday’s energy White Paper that he believed that consumers would change their behaviour to save money and reduce their carbon emissions to help to combat climate change. He is shortly to announce a two-year pilot project to test smart meters in several thousand homes.

EDF Energy has already installed smart meters in 200 homes in London and the South East in the past few weeks but hopes to involve 3,000 households in the trial before a national roll-out.

A smart meter would also provide an easy way to allow homes to sell back unused energy to the National Grid.

There was little in the White Paper, however, to encourage consumers to invest in wind turbines, solar panels and other microgeneration schemes.

The Government has already announced that it is lobbying the EU to allow only 5 per cent VAT on these items but there was no attempt to push energy companies to offer higher prices for surplus energy from “green” homes.

At present some companies buy back at 4p per kilowatt when they charge customers at least 10p.

The policy paper merely called for companies to be more transparent in the tariff they offered to buy in power.

The National Consumer Council was disappointed about the lack of urgency from the Government in the introduction of smart meters.

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