Do Smart Thermostats Really Save You Money?

The rising cost of energy has become a significant concern for households and businesses alike. 

According to Statista, the U.S. Consumer Price Index (CPI) for energy surged to 139.6 index points in 2023. This follows a trend seen in many countries post-pandemic, as economies recovered and placed a strain on energy supplies. As a result, energy prices reached highs not witnessed since 2008.

In this context, many homeowners are looking for ways to reduce energy consumption and lower utility bills. Smart thermostats have become a potential solution, but do they genuinely deliver on their promise of saving money? 

Let's discuss the benefits and drawbacks of smart thermostats to help you decide if they're a worthwhile investment for your home.

Potential Benefits of Smart Thermostats

Smart thermostats offer features designed to optimize your home's energy usage and potentially lead to significant cost savings on your utility bills.

Their key benefits include:

1. Reduced Energy Consumption

According to the U.S. Energy Information Administration (EIA), air conditioning and space heating together account for a significant 31% of residential electricity consumption. Specifically, air conditioning used 19%, and space heating used 12% of the energy consumed in households as of 2020.

This is where smart thermostats shine. Unlike traditional thermostats that endlessly pump heat or air conditioning, smart models can learn your schedule and occupancy patterns. This prevents unnecessary heating or cooling, significantly reducing the strain on your HVAC system and leading to substantial savings. 

2. Learning and Adapting

Beyond basic scheduling, some smart thermostats are like personal climate assistants. They use built-in algorithms to analyze your routines and preferences. These models can adapt your schedule accordingly, reaching your desired comfort level efficiently. 

The thermostat anticipates your needs, keeping you comfortable while minimizing wasted energy. This personalized approach to temperature control optimizes both comfort and efficiency, potentially leading to significant cost savings on your energy bills.

3. Remote Control

Forget the days of blasting the AC or heater the moment you walk in. Smart thermostats offer the ultimate convenience: remote control. With a dedicated app on your phone, you can adjust the temperature from anywhere, anytime. 

No more waiting for the house to cool down. You can ensure a comfortable environment awaits you the moment you step through the door. This eliminates wasted energy and ensures immediate comfort, making your return home even more enjoyable

4. Geofencing

Smart thermostats utilize technology that automatically adjusts temperatures based on your location, preventing unnecessary heating or cooling when you're away. This geofencing feature is especially advantageous during extreme weather conditions. 

For example, CBS News reported that scorching temperatures across California are forcing families to stay indoors or find ways to keep cool. At Lodi Lake, dozens of families struggled to beat the heat during a holiday week. 

For families in Lodi, geofencing can significantly enhance comfort and efficiency. When they leave home for outdoor activities, the thermostat can automatically raise the temperature to reduce air conditioning use. As they return, the system cools the house down, ensuring a comfortable environment upon arrival. 

This saves energy, reduces utility bills, and provides a seamless and responsive home climate management solution.

5. Offsetting Costs with Rebates

Potential utility rebates can make installing smart thermostats even more appealing. Many utility companies offer incentives to encourage energy efficiency, including rebates for purchasing and installing smart thermostats. 

Moreover, according to Cincinnati.com, Ohio House lawmakers recently approved three energy bills aimed at promoting energy efficiency. Among these is House Bill 79.  It proposes charging residential customers up to $1.50 per month to fund rebates and discounts on smart thermostats and other electricity-saving measures.

This bill, pending approval from the Ohio Senate and Gov. Mike DeWine, underscores the state’s commitment to reducing energy consumption.

For homeowners, these rebates can significantly offset the initial cost of smart thermostats. Smart thermostats can save customers between 10% and 15% on their energy bills by lowering temperatures when residents are not home. The combination of immediate savings and potential rebates presents a compelling financial benefit.

Potential Drawbacks and Considerations

While smart thermostats offer numerous benefits, there are potential drawbacks and considerations to keep in mind. One significant consideration is the initial cost. Smart thermostats tend to have a higher upfront cost compared to traditional thermostats. 

The advanced technology, features, and connectivity options contribute to this increased expense. However, many homeowners find that the long-term savings on energy bills can offset this initial investment.

Another important factor is that the savings from using a smart thermostat can vary. Factors such as the local climate, the level of insulation, and usage habits play a critical role in determining how much you save. 

For instance, homes in extreme climates may see more significant savings due to the high energy costs associated with heating or cooling. Conversely, well-insulated homes may already be energy-efficient, resulting in smaller incremental savings from a smart thermostat.

Maintaining discipline in using smart thermostats is crucial for realizing potential savings. Manually overriding the smart features, such as frequently changing the temperature settings, can negate the benefits. It’s essential to allow the thermostat to operate autonomously based on its learning algorithms and schedule adjustments to maximize energy efficiency.

Regular maintenance of your home’s plumbing and HVAC systems is also important. Well-maintained HVAC systems run more efficiently, complementing the smart thermostat’s efforts to save energy. 

For example, ensuring that air filters are clean and that the system is free of leaks can enhance performance. Similarly, maintaining plumbing systems, like ensuring proper insulation of hot water pipes, can help reduce overall energy consumption.

Rellaire Smart Home Systems notes that taking an annual maintenance contract for HVAC and plumbing systems can significantly help. These contracts typically include regular inspections, cleaning, and timely repairs, ensuring optimal performance throughout the year. 

Frequently Asked Questions

Do you save money by lowering your thermostat?

Yes, you can save nearly 10% a year by lowering your thermostat to 7°-10°F for 8 hours daily. Savings are typically greater for buildings in milder climates than those in more severe climates.

What is the best temperature for a thermostat to save money?

A thermostat set to 68 degrees Fahrenheit in winter is optimal for saving money. This setting minimizes heat loss through walls, windows, and doors, which are major sources of energy wastage, helping to reduce heating costs effectively.

Should I keep my thermostat on continuously?

It's generally more efficient to adjust your thermostat based on occupancy. Lowering the temperature when you're away or asleep can save energy and money. Leaving it on all the time at a constant temperature can result in unnecessary energy use and higher bills.

Smart thermostats offer a compelling combination of convenience, comfort, and potential cost savings. However, the initial cost can be a deterrent, and the amount you save depends on your climate, home insulation, and usage habits. Additionally, reaping the full benefits requires some user discipline to avoid overriding the smart features.

Ultimately, whether a smart thermostat is a worthwhile investment depends on your circumstances. If you're looking for a way to optimize your home's comfort and energy efficiency, a smart thermostat could be a great choice. 

By carefully considering the potential benefits and drawbacks, you can decide if a smart thermostat is the right key to unlocking savings.

Here are some other articles related to your search:

• Where to Put a Thermostat in the House

• Why do you need a smart thermostat?

• A Closer Look at Thermostatic Control Technology’s Impact on Modern Construction