Just How Much Money Can Smart Thermostats Actually Save?

With heating and cooling making up nearly half of the average home's energy costs, many people are turning to technology for help. Smart thermostats promise to lower utility bills by an estimated range of $50 to $100 typically, cutting unnecessary energy use through a variety of methods. With so many products on the market, you might be wondering: How much money can a smart thermostat actually save me?

The idea behind a smart thermostat is simple: It learns your temperature adjustment habits, adjusts your home's temperature automatically, and gives you greater control, whether you're on the couch or halfway across the world. While the convenience is obvious, what about the dollars and cents? Are the savings significant enough to make a real dent in your energy bills? We will break it down by looking at how smart thermostats help cut costs, and what the average annual savings look like based on real-world data.

There are certain ways smart thermostats deploy technology so you can save on your energy bill. Fundamentally, smart thermostats lower your energy consumption by learning your schedule, automatically regulating your heating and cooling, and simplifying remote climate control of your house. Smart thermostats give you more control over the timing and volume of your HVAC system's operation compared to manual thermostats, allowing you to decrease your heating and cooling costs. They can, for instance, lower the temperature while you're sleeping or at work, something often overlooked with a manual thermostat.

To help you save more money, a lot of smart thermostats also offer thorough energy reports. They can even tell when no one is home, provide recommendations for temperature settings, and remind you to change your air filter. Certain models employ geofencing, which modifies the temperature according to the location of your phone. This eventually saves you from making the costly mistake of heating or cooling a vacant house.

Not to mention that you can use your phone or smart speaker to change settings from any location. Are you stuck at work late? Simply turn down the heat on your app. Going home early? Before you enter, preheat everything. Together, these minor changes can lead to noticeable cost savings from your smart thermostat.

One of the most well-known brands of smart thermostats, Google Nest, claims that customers typically save 10-12% on their heating and 15% on their cooling costs if they use their product. Another popular brand, Ecobee, claims you can save around 26% on heating and cooling bills combined with their product. However, actual results will depend heavily on your home's weather and climate, your HVAC system's age, and your habits. 

For example, the effects will probably be more obvious if you reside in an area with extremely high or low temperatures. In a similar vein, you will likely save more money than someone who was already energy-conscious if you previously operated your system inefficiently, such as running the air conditioner nonstop. Although the initial cost of a smart thermostat — typically between $100 and $300 — may seem high, many utility companies provide rebates that lower the cost of making the switch. The thermostat could pay for itself in a year or two, and then keep putting money back into your pocket.

Ultimately, while savings may vary, smart thermostats offer the potential to cut down on monthly costs and provide homeowners with convenience and knowledge over how they use energy.