The South Australian Government will spend $2.2 million on new software after almost $1.5 million was mistakenly paid to energy retailers.

A parliamentary committee has heard that the old system, CASIS, caused false concessions to be paid to energy companies.

Despite the software costing over $7 million to implement, another $2.2 million will now be spent replacing it.

Communities Minister Zoe Bettison said the Government had managed to recover just $116,000 from the retailers.

But she said the new program would include checks and balances to make sure it did not happen again.

“We'll be looking to the market place to the provision of the various components, which is likely to result in multiple contractors rather than a reliance on one developer or firm,” she said.

“Development of the system will be staged, rather than all components commencing at once. Success at each stage will determine moving onto the next stage.”