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More than 26 million homes across Britain are to receive smart meters to track their energy usage by 2020.
The government said that the roll out of the meters will help households and businesses have more control over their energy bills as they will no longer need to rely on estimated readings.
This will help them save money and will also enable them to be more energy efficient and enjoy a greener lifestyle.
Ed Miliband, the energy and climate change secretary, said: "The meters most of us have in our homes were designed for a different age, before climate change. Now we need to get smarter with our energy."
He added: "Smart meters will empower all consumers to monitor their own energy use and make reductions in energy consumption and carbon emissions as a result. Smart meters will also mean the end of inaccurate bills and estimated meter readings.
A consultation on the proposals has been launched and will continue until July 24th.
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