Use of smart meter technology in Europe is set for rapid increase over the next five years, according to analyst Datamonitor.

New research predicts that 41 per cent of European homes and 89 per cent of North American households will be equipped with the electronic energy meters by 2012. Current installation figures are just six per cent in both regions.

Smart meters provide users with real-time feedback on the costs and rates of energy consumption, a feature which potentially allows for increased efficiency and reductions in carbon emissions. Uptake of the new technology will be likely to run parallel to advances in communications, due to the need to accommodate high volumes of data traffic.

'The volume of meter data needing to be transmitted from smart meters to the utility is placing an increasingly heavy burden on traditional 2G mobile networks,’ said Alex Kwiatkowski, lead analyst at Datamonitor.

'Consequently, larger bandwidth options are needed. Broadband has been a key facilitator of smart metering given that a lot of the infrastructure already exists, however the likes of WiFi can also have a key role to play in densely-populated areas such as towns and cities.'

Uptake across Europe is expected to be slower than in the US, as a result of competition from the larger spread of energy providers. Centrica and EDF are testing smart meters in homes across the UK.

The UK government’s Energy Review included proposals to require energy suppliers to install smart meters in all but the smallest businesses within five years.