The boss of British Gas has called for households to face mandatory smart meter installations weeks after government figures showed that almost 4m meters are not working.

Chris O’Shea, the chief executive of the British Gas owner Centrica, told a committee of MPs that smart meters should be installed in all homes through a “street by street” programme, in order to cut the costs of creating a smart grid.

The energy boss, who has come under fire after British Gas was revealed to have used debt collectors to force-fit prepayment meters in vulnerable customers’ homes, said the company would be willing to install smart meters on behalf of other energy suppliers.

O’Shea was speaking at a parliamentary hearing on how to make energy bills more affordable just weeks after government data revealed that almost 4m smart meters have stopped working properly.

He told MPs: “In order to have the proper smart grid – that is required to keep costs low in the future and have a responsive grid – everyone should have a smart meter. One of the things we should consider is whether this should be a voluntary programme or a mandatory programme.

“We have 1,700 smart meter installers and we would be happy to install smart meters for Octopus, for E.On, for anybody. We would split the UK up street by street, rather than customer by customer. If you mandated it, then we could have that change in programme. It could be done within the next five years or so.”

O’Shea’s proposal was rebuffed by Rachel Fletcher, a director at the rival energy company Octopus and a veteran utilities regulator, in the same committee hearing.

Fletcher said: “This should not be done to consumers. What we see [at Octopus] is people queueing up asking for a smart meter where we are offering tariffs or tools which allow them to save … hundreds of pounds a year.”

The government launched its smart meter programme in 2011 and had hoped to install smart meters in households across the UK before 2020 to help reach its net zero ambitions. About 60% of homes have a smart meter, according to government data.

Smart meters are considered a key tool in helping households reduce their energy use. They use real-time data to make better use of renewable energy when it is available and cut the need for fossil fuels, as well as relaying instant data on households’ energy use.

But the programme, which is being carried out by energy suppliers, has been dogged by delays and technical faults. The government’s recent data suggested that customers with smart meters may have been overcharged on their gas and electricity bills.

Officials have called on the industry regulator, Ofgem, to take action against energy providers who are not supporting customers and meeting legal obligations.