As general election campaigning ramps up, energy bills are likely to come up on doorsteps across the country. Many consumers have told us at Smart Energy GB that they worry about understanding their energy costs and keeping their gas and electricity under control.

The average annual energy bill now tops £1300, and many consumers have told Smart Energy GB over the past few months that they do not feel it is easy to understand the information that anyone would need to make sure they are getting the best deal.

But as political parties look for ways to give consumers a better deal, what is going to make a difference?

Any policy will only make a real difference to the experience of consumers if the way we buy energy – currently an analogue, mechanical process – is brought fully into this century. Our current energy meters have barely changed in what they offer consumers since they were invented in 1888. Clicking away in a cupboard, their dials do not tell us anything useful, or give us the information we need to compare prices online as easily as we can these days for car insurance or mobile phone tariffs. As the meter does not connect with the energy supplier, unless a meter reader visits or you phone in with your reading, your energy bill will be estimated. It is no wonder energy suppliers received over 2,000,000 complaints last year about bills.

The roll out of smart meters will transform this experience. It was initiated by Ed Miliband as secretary of state for energy and climate change in the last government, and taken forward by the current administration. By 2020, 50 million smart meters will be installed in 26 million homes around Great Britain. It is not compulsory to have one fitted, but Smart Energy GB will be leading the consumer awareness campaign to persuade every household to say yes to having them installed.

With smart meters, consumers will be able to see what they are spending on gas and electricity in pounds and pence, and will be able to use that information to control how much energy they are using and to shop around for the best deal. Smart meters will make switching supplier quicker and easier, and will transform the experience of customers on pre-payment meters.

But the savings are not just about individual consumers remembering to switch off the lights. As well as giving consumers more control over how they use gas and electricity, smart meters will reduce overheads and so bills, as there will no longer be a need for physical meter readings, and bills will be more accurate. There will also be further savings felt throughout the energy network as the backbone infrastructure becomes more efficient.

As with any major infrastructure programme initial investment is needed, but by 2020 each household will be feeling a net benefit of £26 per year, rising further to £43 by 2030.

Smart meters are a transformative and essential technology, replacing an outdated, antiquated system. They will put power in the hands of consumers and should be a bedrock for the energy policy of any party aiming to transform the experience of consumers.

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Sacha Deshmukh is chief executive of Smart Energy GB and deputy chair of Citizens Advice England and Wales

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Consumers and the energy market: What’s Labour’s offer beyond the freeze?
12.45-2pm, Sunday 21 September 2014
Lancashire Room, Peter House, Oxford Street, Manchester, M1 5AN

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Photo: Lee Hayward

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