In a move it hopes will save people money and cut carbon emissions, the Department of Energy and Climate Change has demanded energy firms install the meters in every home within the next 10 years.
Lord Hunt, minister for energy and climate change, 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."
What is a smart meter?
Only a few homes currently have smart meters, although many people have more basic energy monitors to help them keep track of the power they use. Once the technology is fitted, you won't have to read your meter or pay estimated bills - your gas and electricity use is sent directly to your energy provider.
The meters also enable the household to keep track of the amount of energy they're using by displaying the information on a screen inside the house.
Scott Byrom, moneysupermarket.com's utilities expert, thinks this development will end the problem of incorrect billing. This issue arises because a lot of people are billed based on estimated usage.
He explained: "It can only be a positive step to make bill payers more aware of their usage levels and, importantly, there is no doubt smart meters will put an end to estimated bills and meter readings.
"Customers won't ever have to overpay or find themselves in debt with their energy supplier once smart meters come into force. Not only this, but it will enable consumers to keep a close eye on their energy consumption, allowing them to curb unnecessary usage and make some much needed savings."
What is an energy monitor?
It will take 10 years for the government's plans to be fully implemented but, in the meantime, an energy monitor will help you become more energy conscious.
These don't submit your meter readings for you but they do show exactly how much energy you're using - in real time. That means you can see how much you've used in a day, how much that will cost and the amount of energy you're using at any one time.
Research by British Gas shows that people can save as much as
£110 a year by being able to see real-time information on their energy costs, because it helps them modify their behaviour and cut the amount they use.
That makes a monitor a great way to bring bills down and protect the planet.
You can pick up one of these gadgets for around
£30 but a number of energy firms are providing them free with certain tariffs. For example, E.ON's EnergySaver fixed tariff comes with a free monitor, as does nPower's Go Fix energy plan.
British Gas is sending one to people who sign up to its new EnergySmart service - where customers submit monthly readings by web or text and only pay for what they've used that month.
How else can you cut bills?
There are also plenty of other ways of keeping your energy bills down. Act on these today and you could cut your energy bills this winter.
Compare and switch
We say this a lot, but this really is the easiest way to lower your bills. Millions of households have never changed energy provider, yet there are potential savings of
£325 a year to be had.
Online deals are the cheapest and switching is easy - use our
gas and electricity comparison tool to find the best deal for your circumstances. You can apply online and your new energy provider will arrange the switchover for you. You may find you don't even need to change provider and that your existing supplier can offer you a cheaper deal than the one you're currently on. Turn the thermostat down
Obviously sitting in the cold is no good, but reducing your room temperature by just one degree saves you an average of
£55 a year, according to the Energy Saving Trust. Close the curtains
There's no point heating your home only to have the warmth escape through the windows. Draw your curtains at dusk to help keep the heat in - it's cosier too.
Don't charge for too long
When you leave your laptop or mobile phone on charge, it will continue using power even when the battery is full. Don't leave your gadgets charging for longer than necessary.
Avoid standby like the plague
Leaving your gadgets on standby instead of turning them off may save you the tiny inconvenience of switching them back on again, but it will also cost you a fortune over a year.
Fill your washing machine up
If you're using a dishwasher or washing machine, make sure you fill it to the brim - one full load will use less power than two half loads.
Saving energy and money is really simple once you've changed a few household habits. Read our article '
Ten simple steps for saving energy' for even more tips on cutting the power you use.
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