The government has signed contracts with EDF Energy, E.ON UK, Scottish and Southern Energy, and ScottishPower to conduct the trials, which will be funded by GBP10 million from the government and matched by a similar amount from the companies involved.

The trials will include around 15,000 households receiving smart meters and 8,000 more receiving clip-on real-time display units for their existing meters. The other households in the trial will be testing new ways of receiving information to help them cut their energy use.

While clip-on real-time display units show how much energy a household is using, and how much it is costing when individual appliances are turned on, smart meters give information about energy use either through linked display units, or the internet or television. Smart meters also allow energy suppliers to communicate directly with their customers, removing the need for meter readings and ensuring more accurate bills.

The trials, which are being managed by UK energy regulator Ofgem, will also look at increasing the frequency of billing, the impact of more accurate bills and encouraging consumers to become more energy efficient through more information and community engagement.

UK business and enterprise secretary John Hutton said: Changing consumer habits is vital if we are to cut our energy use and reduce the impact of climate change. Smart meters provide the cutting edge technology to enable this to happen. The results of the trials will provide invaluable evidence to support the future rollout of displays and smart meters; helping to cut consumer bills and cut our carbon emissions.

Smart meters are expected to be rolled out to most households within the next 10 years, and all but the smallest businesses in the next five years. In the meantime, the government has proposed that real-time display units be provided with any new meters fitted from 2008, and to all households that request them between 2008 and 2010.