Smart and smarter: how to bring down bills

Customers are still digging deep into their pockets to pay their gas and electricity bills, despite five of the six biggest energy companies recently announcing price reductions. The painful truth is that the new round of cuts has only scratched the surface. No energy firm has brought bills down by more than 10 per cent, against rises of 40 per cent in the past year. As a result, according to the Government's Energy Saving Trust, the average household spends around £1,300 a year on heating, lights and other appliances.

So it's still crucial for cash-strapped customers to reduce their consumption in order to cut bills. Fitting energy-saving light bulbs, lagging the boiler and insulating walls are all ways of preventing waste, but just as important is simply being aware of how much energy they are using.

This, at least, is the theory behind the smart-metering concept – a wireless transmitter now being sold by several UK energy suppliers that displays readings taken from your meters. "One of the fundamental barriers stopping individuals from saving energy is that they don't understand how use at home relates to their gas and electricity bills," says Philip Sellwood, the chief executive at the Energy Saving Trust. "Smart meters give householders the power to work out exactly how much energy they are using."

AlertMe, a firm specialising in home security, has come up with an even more ingenious way for people to keep on top of energy consumption. Like smart meters, the AlertMe smart-plugs system allows customers to monitor their energy use from a central display, but it displays the readings in pounds and pence rather than kilowatt hours.

Where AlertMe's products differ markedly from smart metering is that they enable customers to switch appliances on and off automatically through a website. They work as part of the online wireless AlertMe system, which uses a hub plugged into a broadband modem. Originally designed for home security, the technology has been adapted to allow consumers to understand and, more importantly, to control their energy consumption.

The hub acts as a gateway between the internet and the devices in the home and can be set up to monitor and react to changes in the house. In the same way that home-security customers can receive a text, phone or email alert warning them that a smoke alarm, say, has gone off, they can also be told if their energy consumption goes below or above a set level. So if a freezer or fridge were to stop working or lose power, the AlertMe system can be set up to send a text to let customers know.

Smart plugs can also be used to avoid costly standby wastage simply by plugging in particular appliances, such as a home-entertainment system, and then turning them all off through a special key fob that sends a message to the hub whenever customers leave or enter the house.

A main benefit of the system is that it allows customers to check the accuracy of meter readings. "The way energy consumption is currently measured is ridiculous, with accurate measurements being taken just once a year on average by the energy firms," says Pilgrim Beart, co-founder of AlertMe. "If you paid for your shopping that way, you would never know how much anything actually costs."

The big question is whether the potential savings with such devices are outweighed by the cost, but AlertMe claims its service pays for itself in less than one year by cutting consumption by 20 per cent. At the moment individual smart plugs cost £25 each, but you'll also need to buy the central hub, which starts at £149.

The company can be contacted at www.alertme.com

Big switch: 'I just laughed – the bill was so cheap'

Toby Cruse, 23, an IT manager from Oxted in Surrey, has had the AlertMe system on trial for six months in his new flat. Toby likes the idea that he is saving money and that installation was hassle free. "All the sensors are battery powered and wireless, so there's no need for carpets to be ripped up. It's really easy to set up by yourself and you can customise the system to fit your home."

As Toby has no billing history at his new address, he isn't sure how much he is saving through AlertMe, but he feels it's making a difference: "When my first energy bill came in, I just laughed because it was so cheap. The ways you can learn to save money in your home through a structure like this are endless. If you actually throw figures at people, they really begin to understand how much energy they're using. It's all about connecting power usage to cost, and if you use the smart plugs for all your appliances, you will start to see exactly how much can be saved by switching them off."

This is only the beginning, says Toby: "The end goal in my eyes is complete home automation, so you don't have to think about what you've left on or off, whether it's heating, lighting or security. You could set it up to the exact requirements that you want and your house would be looking after you."