Do Smart Thermostats Save Money?

Smart thermostats are becoming increasingly popular among tech enthusiasts and homeowners alike seeking to upgrade their homes and control its climate from their phones. These are often touted as money-savers as well, but it’s unclear at first glance if that’s actually the case.

Below, we’ll answer whether or not smart thermostats actually save money, compare them to other options such as programmable units, and review other benefits they provide. 

How Does a Smart Thermostat Work? 

A smart thermostat optimizes energy usage in your home by turning the heating or air-conditioning unit on or off based on a variety of conditions, such as time of day or whether anyone is home. Each model operates a bit differently from the next, but most can connect to components including motion detectors, smartphones, home automation or alarm hubs, and even weather services, to optimize energy usage. When set up correctly, these systems require very little user input, and can adjust energy consumption to an extremely precise level. 

Programmable vs. Smart Thermostats

Programmable thermostats work in a similar manner, but operate only based upon user input, so the homeowner has to manually adjust the temperature. These often come with several memory slots to save standard climate adjustment patterns—such as decreasing temperature during a standard workday—but again, each setting has to be programmed manually.   

Smart thermostats are more precise, and can theoretically save more money, since they don’t rely on one input and instead use a variety of factors to determine the optimal time to turn climate control units on or off. 

Which is better for your situation varies based on many factors, such as how consistent you are with thermostat adjustments, how well you would utilize a programmable unit, and how regular your schedule is, among others. 

How Much Will I Save With a Smart Thermostat? 

When determining whether you’ll save with a smart thermostat, first consider your current setup and habits. Do you have a manual or programmable thermostat? If the former, do you actively manage the temperature in the house, regularly turning it up and down to save energy? If the latter, do you actually use the programmable functionality? 

The short answer to the question “How much will I save?” is that it’s possible to see improvements of 10% to 12% or more, but the reality is much more complicated. Several studies show likely reductions in monthly bills, but the consensus on exact savings is a bit inconclusive. 

When considering what you’ll save, assess your own usage honestly. 

For example, three studies of Nest brand smart thermostat usage—two independent, and one company funded—found savings of 10% to 12%, but it wasn’t clear where customers started before the analysis. Similarly, the U.S. Environmental Protection Agency (EPA) states the average household can save $180 per year by upgrading from a manual thermostat to a programmable unit, but doesn't breakdown savings from upgrading further to a smart component. 

Another point to consider is that the EPA study was conducted with consumers who used their programmable thermostats correctly, but this often isn’t the case. According to another study by the nonprofit American Council for an Energy-Efficient Economy (ACEEE), 89% of programmable thermostat users don’t program for weekends, and 30% don’t program them at all. So when considering what you’ll save, assess your own usage honestly. 

After taking stock of your current situation, you can begin to more accurately assess potential savings, with most likely falling into one of the following categories: 

Thermostat Newcomers
Likely to Save $180 or More Per Year

You fall into this category if you own a manual or programmable thermostat that isn’t optimized or used regularly. If this is the case, you could save at least $180 with a smart thermostat—more than enough to break even on almost any such component in the first year.  

Thermostat Power Users
Likely to See Incremental Savings

If you own and correctly use a programmable thermostat often, it’s unclear how much you’ll save. Given all the theoretical benefits, it’s likely you’d at least experience a small real-world improvement, but there’s not enough data to know for sure. 

Other Reasons to Upgrade

Besides the obvious cost savings, a smart thermostat provides a host of other benefits that could still make them a great investment.

The following are some of our favorites: 

Save Time

Imagine you’re the world’s best thermostat manager. You have your family’s schedule memorized, you know how long your home takes to heat up and cool down, and have your thermostat programmed at the perfect intervals. 

How much time would you spend programming and adjusting their thermostat? In our experience, the answer measures in hours. This is especially significant when compared to a smart thermostat, which typically cuts programming time drastically (or to zero when professionally installed) and requires no ongoing maintenance. Even taking into consideration the time to research and troubleshoot during initial setup, and a smart thermostat starts to look like a bargain. 

No Ongoing Maintenance

Most programmable thermostats have seven slots for pre-scheduled routines, but the moment your schedule changes, these require an adjustment. Smart thermostats are much easier to adjust on the fly, and typically require simply a few taps on a smartphone. 

Energy Usage Reports

Many smart thermostats have built-in energy reports to analyze usage and discover areas for improvement. A smart thermostat already gets you close to peak home energy optimization, but this adds another level of insight and control for further optimization. 

Alerts for Irregular Events

You can set your smart thermostat to send you notifications for irregular events, such as an unexpected rise in temperature outside, or if your heater or AC (air-conditioning) unit is malfunctioning. These alerts give you greater control over your home and enable you to compensate for abnormal situations, while keeping your house consistently comfortable. 

Stay Comfortable

According to the aforementioned study of Nest thermostats, 12% of respondents reported being more comfortable after installing a smart thermostat in their homes. Thermostats adjust for many dynamic situations, and the additional inputs possible with smart thermostats facilitate greater consistency in maintaining a comfortable temperature. 

Control Ventilation 

Even if you don’t need the heat or AC activated, it can be helpful to turn your ventilation on at regular intervals to keep fresh air moving throughout the house and ensure proper filtration. Many smart thermostats grant control over this functionality, as well as the temperature, helping to keep your home clean and comfortable. 

The Bottom Line
Smart Thermostats Offer Major Convenience & Comfort, With Possible Savings

Investing in a smart thermostat will provide savings if you have a traditional manual thermostat or a programmable model you don’t use correctly. Other use cases are likely to enjoy marginal improvements in monthly utility bills. Either way, a smart thermostat offers significant advantages in convenience and comfort, making it an excellent purchase.

For help designing a smart home automation and security system that will help you save energy while keeping your family safe, contact us. Our team of experts is ready to answer your questions and provide friendly, helpful service.