'Save £134m per year' with smart meters in capital

Residents of Barnet have the most to gain with a potential combined saving of £6.81 million, followed by Croydon with savings of £6.49million and Bromley (£6.34 million).

At the other end of the table, Barking and Dagenham residents would save £2.75million and people in Hammersmith and Fulham £2.98million.

Smart meters allow householders to monitor how much their energy use costs them - and the environment. They can also tell which household appliances are costing the most money to run.

The study was commissioned by the Energy Saving Trust, an organisation that helps tackle climate change. It claims that if every household in Britain switched to a smart meter we would save a combined £1.2billion a year on energy costs and prevent 7.4 million tonnes of carbon emissions.

Researchers discovered that eight in 10 people do not know how much they are paying for their power, which they said proves the need for smart meters in all homes.

Philip Sellwood, chief executive of the trust, said: "Our study found that energy bills are the most difficult to understand of any household bill - twice as hard as phone bills and four times as difficult as bank statements or credit card bills.

"The lack of transparency surrounding energy usage is one of the biggest problems holding back the UK's fight against climate change and without the uptake of smart metering, this situation is not going to change any time soon."

Almost half of respondents were interested in having a smart meter and 96 per cent of those said they would use it to help cut their home energy use.

Later this month, energy minister Malcolm Wicks will reveal how 26 million homes will be fitted with smart meters.

Duncan Sedgwick of the Energy Retail Association said the devices represented a change "bigger than North Sea gasification". "This will fundamentally change our relationship with energy usage," he added.

Experts estimate it would cost about £100 to supply and install each meter, although energy companies estimate that they could recoup about half that amount in savings from the elimination of estimated bills and home visits by meter readers.

The move to smart meters is also expected to trigger competition between suppliers offering different types of the device.

Last week, Gazprom, the world's biggest gas group, bought a stake in British smart meter supply company TruRead, hoping the product will make its supplies more attractive to UK customers.