How Do Smart Thermostats Save Money

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Smart home devices are becoming more and more common in households. Many smart devices are made to help us save time and money, like smart thermostats. 

We’ve all heard that we should get one of these devices to save 10-20% of energy costs, but how do smart thermostats save money exactly? What do smart thermostats do to save money? Is a smart thermostat worth it?

Smart thermostats will save you money due to the energy savings as a result of well-managed efficiency and performance. Savings can range from 5% to 20% and more. The savings depends on your lifestyle, habits, temperature preferences, location, and even how your house is constructed.

Let’s take a closer look at smart thermostats to understand how they work and why they’re able to save you money. 

What is a Smart Thermostat?

A smart thermostat is an internet-connected thermostat that will efficiently control the temperature in your smart home for the highest energy savings and performance.

The smart thermostat will learn to adjust temperatures for different times of the day based on your habits, always keeping the homeowners happy. 

Half your energy bill is heating and cooling, meaning your thermostat controls half of your electricity bill. That’s why smart thermostats are continuing to enter more people’s houses and apartments.

You’ve probably heard of the top two brands: Google Nest and ecobee thermostats. They’re usually controlled through a phone, voice-activated smart speaker, or other internet-connected devices. You’re able to set temperatures and see energy consumption. 

Manual vs. Programmable vs. Smart Thermostat

Thermostats have changed over the years. To better understand how smart thermostats differ from other thermostats, let’s compare the Manual vs. Programmable vs. Smart thermostats. 

Manual Thermostat

Manual, regular thermostats allow you to adjust the temperature in your home by turning a dial or moving a lever to a specific temperature. Your HVAC system starts working immediately. There’s no programming of schedules with the manual thermostats. 

The worst part is if you leave the house for work and forget to turn down the heater or air conditioning. That’s the sound of the cash register at your energy company going “ding, ding, ding” and ringing up more money. 

Programmable Thermostat

Programmable thermostats are better because you’re able to schedule times for when your heating or air conditioning should be automatically turned higher or lower. 

In the example of leaving your house, you don’t have to worry about higher energy costs because you can schedule to turn down the heating or cooling at a specific time when you usually leave for work. 

When you finish work for the day and head home, you want to come home to a comfortable home. Not freezing nor too hot. You’ll be able to program the thermostat to automatically turn the heating or air conditioning early, so when you get home, you can go straight to relaxing. 

But what if you leave work early? 

Programmable thermostats are unable to be accessed. Wouldn’t it be nice to be able to set the temperature at home as you leave the office? That’s where smart thermostats come in. 

Smart Thermostat

Smart thermostat vs Programmable thermostat is the closest comparison. The core similarity between them is that you’re able to create specific schedules for temperatures. 

Smart thermostats take it a step further by learning about your habits and home to adjust temperatures to save on energy costs. They allow you to go about your business and not need to think about setting the thermostat. 

It’s sort of like a “set it and forget it,” except that you’re not setting it because it sets temperatures by itself based on your lifestyle and how to save the most money.

If you want to set the programmable thermostats by yourself, just don’t become another statistic. Nearly 50% of households with programmable thermostats forget to set the thermostat. 

Maybe you’re saying that you don’t use your thermostat and HVAC all that much, so you don’t need to spend 2-5 times the money for a smart thermostat. Maybe you live in a climate where you don’t have much temperature change throughout the year, so you don’t need a smart thermostat.

How Does a Smart Thermostat Save You Money?

Doesn’t Stop Learning

Smart thermostats aren’t that smart when you first unbox and install them. It takes you teaching it your usage patterns for a few days. How you like your temperature from when you turn it up and down to find that comfortable temperature. Smart thermostats are also Learning thermostats.

I like my temperature at 70° at night when I go to bed and my Nest has learned to automatically set it at that temperature when it’s time for bed. 

The thermostat starts to learn your daily routines and know when to turn down the heating or cooling for energy efficiency to save on energy usage. 

Smart thermostats will learn how your house heats and cools. It will learn how effective it will be at heating and cooling depending on how your house is built. 

The thermostats learn about the surrounding environment and outside temperatures. It tracks temperature and humidity to be able to set optimal temperatures. If you have preferred temperatures, you can also set those temperatures in the thermostat settings.

Smart Thermostats Are Always Working for Higher Efficiency

Smart thermostats can detect when you’re not home. They have sensors that know when there’s no movement in the house. They’ll start turning the heating and cooling systems lower when they know no one’s around. 

All the different smart thermostat brands name the feature something different, but still similar. Nest calls it “Home/Away Assist” and ecobee calls it “Home/Away.” They’ll use built-in motion sensors and even the GPS in your phone to know when you’re not home. The other members of your family should also put the app on their phones, so the smart thermostat will always know if someone’s home or not. 

There are vast amounts of data constantly tracked by smart thermostats. It will optimize temperature settings based on your daily habits. If your schedule is always changing, smart thermostats will not be able to learn and adjust because your habits are unpredictable. Luckily, the apps are there for you to remotely control the thermostat from wherever you are.

Smart thermostats will also provide you with data on how much money you’re saving and how you’re saving it. You’ll be able to see how you can also save a few degrees here and there to cut your energy costs even more.

Smart Thermostats Have a Good Memory

I’m often forgetful, so five minutes after running out of the house, I’ll start wondering what I forgot to turn off. Smart thermostats don’t have that problem. They’ll always remember to adjust temperatures. 

Temperature Setbacks Save Money

Temperature setbacks are just the act of setting the temperature back when you’re not at home or sleeping. Setbacks occur during long periods of around 8 hours for when there’s no need to adjust the temperature. 

The daytime setback turns down the temperature during the day while you’re at work. If you work at home, it won’t make sense to do a setback unless you’re ok with a higher temperature. The nighttime setback turns down the temperature while you sleep to save on heating energy. If you have a blanket or comforter, the nighttime setback shouldn’t disrupt your sleep. 

There is a debate on whether temperature setbacks will save more money or if it’ll cost more to get the home back up to its original temperature. Let’s take a look at one factor that will cost you more money – window and door drafts. 

Heat escapes through windows and doors, especially with older houses. If you leave your temperature at a certain temperature and it runs 24 hours trying to keep your house at that temperature, that’s not saving any money or energy. 

Temperature setbacks won’t have your heating and cooling system running for long periods. You just need the daytime setback when you’re at work for 8 hours and the nighttime setback when you’re asleep for 8 hours. Those setbacks alone save you 16 hours out of the 24 hours in a day. Two-thirds of your daily energy bill was just saved. 

How Much Money Can a Smart Thermostat Save?

You’ve probably heard that smart thermostats can save you so much money on your cooling and heating bills, but how much can they save vs regular thermostats? Many factors play into the equation, like location and heating vs air conditioning costs. But in general, studies have shown 10 to 20 percent savings on average overall. 

Nest conducted a study with its customers across 41 states and found savings of 10%-12% in heating energy usage and 15% in cooling usage. On average, the Nest will pay for itself in under two years. See the latest prices for Nest on Amazon and do your conservative calculations of 10% savings to see how long it’d take to recoup the Nest’s costs. 

ecobee claims up to 23% savings with their smart thermostat features and easy scheduling. They offer monthly energy savings reports indicating how much you’ve saved and where you can save even more. I have a full, in-depth ecobee thermostats comparison to find the best one.

Check today’s ecobee prices on Amazon and compare it to the Nest recoupment above. 

How to Calculate Energy Savings

These are general savings calculations as you’ve seen above and will see more below, your lifestyle and home construction will determine your actual savings. 

Generally, setting your thermostat 1-2 degrees higher or lower will save you 1% – 3% on your energy bill. If you’re at the office for 8 hours per day, lowering your temperature 10-15 degrees will save you 10% in energy costs.  

The average electricity bill is about $120 per month, which is $1,440 per year ($120 x 12 months). 

10% of $1,440 is $144 in energy savings each year just by setting back your temperature when you’re not at home for long periods.

At $144 of savings and depending on the smart thermostat you buy, you just paid off the smart thermostat. 

Setting back the temperature when you’re not at home is just one way you’re able to save money. Let’s take a look at how you might be able to save even more money. 

How Thermostat Setbacks Save Money | Ask This Old House

More Potential Savings for You

Homes and homeowners are all different, so look out for opportunities that you might be able to control to save even more money. Some factors like weather, climate, and energy rates are more or less out of your immediate control, but it’s still good to know for future considerations. 

Let’s look at some of the factors that can affect whether or not you’re able to save more money. 

Smart Thermostat Self Installation

Installing the smart thermostat yourself will help you save a good amount of money. Smart thermostat installation costs can add $100 – $200 to the price of the thermostat you buy. When you’re already spending $100 – $250 for a smart thermostat, it’s worth trying it yourself. There are many YouTube videos out there and you’ll see how easy it is.  

How to Install a Smart Thermostat | Ask This Old House

Energy Rates in Your City 

Utility rates seem to climb every year. Think about how much you’d be saving if you were able to save 10% off your energy usage. If your area’s energy rates are high, you’ve just saved even more money.

Home Insulation

If your home is well-insulated, you’ll be using less energy to control the heating and cooling. For example, there’s less chance of heat escaping that would normally lead to your heater working more to compensate for the heat leakage.

HVAC System Maintenance 

Maintaining your HVAC system will go a long way in preserving the performance and efficiency of the systems to save on energy usage. Simple tasks like cleaning filters every few months go a long way.

HVAC System Multiple Zones 

If you’re able to independently control the temperature in different parts of the house, you’re able to save even more energy. No need to turn up the heat as high in the basement if you’re going to be upstairs for most of the day. 

Different zones of your house will also have different temperatures. Different floor levels and how the house is built in that area of the home will affect the temperature. Your bedroom and basement might have different temperatures. 

Homes with separate temperature sensors and control will be able to save more money.

Vacation Homes or Rentals Like Airbnb

Being able to control the smart thermostat on your phone through the internet is easy to use. You can remotely turn your heating and air conditioning to minimum levels when no one is there. Really handy if you left your vacation home and forgot to turn down the thermostat. You can even setup a trigger when your smart lock locks the door behind your Airbnb guests who have left the property.

Climate Region Where You Are 

Living in areas where you have freezing winters and sweltering summers will lead to higher energy costs. If you live in more moderate climates, your savings will be much higher as your HVAC systems will not need to work as hard to keep a constant temperature. 

Collaborate with Other Smart Home Devices

Smart home devices are made to work with each other to make your life easier. You may need to do some initial setups, but in the long run, you’re going to save more time and energy. 

Maybe you have smart sensors on your doors and windows like this Samsung SmartThings Multipurpose Sensor. You’ll get a notification on your phone that a window or door sensor is left open, so you’ll know to close it. 

Adding on a platform service like IFTTT (If This Then That), you’ll be able to create a series of automated actions, called recipes, when certain scenarios are triggered. Easily set up a rule that if a window is open for more than 10 minutes, then the smart thermostat will automatically turn down the heating or cooling. 

For those who’re less technically inclined, IFTTT offers many recipes that they’ve created or other users have created and shared. 

And we can’t go through collaboration without mentioning voice command capabilities with the likes of Amazon Alexa and Google Assistant. Tell Alexa what temperature you want and let it do the work of adjusting the temperatures.

Conclusion – Do Smart Thermostats Save Money

Smart thermostats longer-term are well worth the initial costs. You’ll have paid off the cost of the smart thermostat within 1 to 2 years. 

Yes, you’ll be able to replicate the same savings by yourself manually, but that’s a strict regime of consistently turning your heating and cooling higher and lower yourself. If you happen to forget to do it even once a month if you leave the house or before you go to bed, you’ve just cut into those projected savings. 

I believe that if you’re able to automate some things, do it. Spend your time on other things.

Now, where did I leave that cup of lemonade …