The goal is to make it easier for you to see how much electricity and gas you're using, while at the same time sending your usage figures directly back to your provider.
WHAT IS A SMART METER?
At the moment gas and electricity companies send you estimated bills.
They can make those estimates more accurate if you occasionally read the meter yourself and submit this to the company, but from time to time, a representative from the company will need to visit to confirm the figure.
A smart meter eliminates the need for this anachronistic process by sending the information directly to your supplier over a secure network (in the UK - called the Smart DCC).
It will also be supplied with an in-home display that can be positioned more conveniently than the traditional meter.
It shows usage and the cost, and will allow you to see weekly and monthly usage.
WHY IS IT BETTER?
A smart meter will allow you to see when your home is using a lot of energy and at what cost - simply watching the numbers turn on a traditional meter didn't mean much, but with the up-to-date pricing information you'll have all the incentive you need to keep your bills down.
Being at home to have someone read your meter is inconvenient for most, and even remembering to provide readings is a nuisance that will go the way of the dodo.
In the future, as adoption of the technology is wider, it will make it possible for energy providers to offer more innovative tariffs.
The system is also part of a wider government programme to create a 'smart grid', giving the designers of the power systems a better understanding of usage patterns.
HOW DO I GET ONE?
Every consumer in the UK, whether you're renting or are the homeowner, can get a smart meter installed at no cost.
Indeed the account holder who pays the energy bills is automatically entitled to one.
Since it replaces your existing gas and electricity meters it needs to be fitted professionally.
You can contact your energy provider and they will arrange a date - or they might well contact you (they are obliged to do so by 2020).
Prior to the installation they will call to check details of your existing meter's positioning and whether you have any special circumstances.
WILL IT SAVE ME MONEY?
Not directly - you will be charged the same rate for the same units of energy.
It's up to you to use this information to your advantage.
According to studies, 85 per cent of smart meter users do exactly that.
There is also the prospect of cheaper tariffs.
Running digital meters is cheaper for suppliers than maintaining analogue ones - some firms are already offering discounts to customers who have smart meters installed.
WILL IT GO OUT OF DATE?
The last thing you want to do is to stop regularly allowing someone in to read your meter only to have to regularly allow an engineer in to fit new meters.
With the progress of technology, though, isn't that inevitable?
In fact, there have been two generations of smart meter - SMETS1 and SMETS2.
The former offered all the advantages described and were fitted by your energy supplier, but if you then chose a cheaper supplier the in-home display was unable to pick up the pricing information and - although you could get the cheaper energy-you were only able to see the units (kVh) like a traditional dumb meter.
It is planned that by the end of 2019 the earlier versions will be able to quietly and automatically download a software update so they work with any supplier.
ARE THEY SAFE?
Contrary to scaremongers (some of whom claim they can start fires, despite no conclusive evidence), smart meter installations are set to make homes safer.
Some homes have not had a full check on their energy meters in years, and smart meters have to undergo one of the world's most rigorous safety-testing regimes and exceed every UK and EU safety standard.
ARE THERE ANY DOWNSIDES?
Clearly governments doesn't think so or it wouldn't be imposing the obligation on the providers.
Indeed the smart metering was born of a desire to make it easier for energy users to switch providers so that the market would be more competitive and help people keep their costs down.
The only real problem is with the DCC, which is a wireless network.
Depending on where your home is, the installer might need to fit an antenna to your home.
Governments keep a list for installers – just check out their respective websites.
If you have solar panels or other home generation fitted, you should check with your provider whether a smart meter will work with them.
You might already have a more sophisticated alternative to monitor energy created in any case.