Explained: How Smart Thermostats Save Money


Smart products are slowly, but very steadily, making their way into the homes of North Americans. Most products heavily promote features that will make living your daily life more convenient, more secure or cheaper and ideally a combination of all three. It's easy to see the convenience of smart homes, but how does this smart home technology save you money though? We'll take a closer look at smart thermostats, how much money they can save you and how exactly they achieve those savings.

A Smart Thermostat?

First things first, let's define what a smart thermostat is and does. Most of us are familiar with those old non-programmable thermostats many of us still use for controlling our home heating. One step up you find programmable thermostats that can be set to specific schedules so they will start heating your room(s) at the right times and lower temperatures when you are away or asleep. According to a study published in the Journal of Energy Research & Social Science, 42% of homes have a programmable thermostat, and 40% of those are not programmed. This mirrors our experience doing energy audits; most homeowners found programmable thermostats clunky and hard to use.

Connected Thermostats

Smart thermostats connect to the internet – typically, they have a wifi chip, but some use communication with a separate hub using the Zigbee/Z-wave protocol. This functionality enables you to control the thermostat through web interfaces or smartphone apps, which is a lot easier than programming on a thermostat! Since the launch of the Nest Thermostat in 2011, it became clear that thermostats could do more than just set schedules. They can incorporate learning algorithms to help you set the most efficient schedules. Finally, smart thermostats are really taking advantage of the advent of smart assistants such as Google Home, Amazon Alexa, and Apple HomeKit so that you can control your thermostats and heating schedules just by using your voice.

And smart thermostats aren’t just for heating systems. It’s also possible to get smart air conditioning control with a smart thermostat for AC.

showing the evolution from dial to smart thermostats

How Does a Smart Thermostat Save You Money?

Thermostats don't have magic tricks up their sleeves. When it comes to saving you money, that is. When you look at the fundamentals of this issue, it is quite simple: heating a space requires energy. The amount of energy you require depends on how warm you want your space(s) and for how long you want them at this temperature.

How it Works

Smart thermostats save money by keeping the temperature as low as possible for as long as possible. Typically, you enter your desired temperature and an indication of your daily schedule. Based on this information the thermostat ensures the room is to your comfort level when you get home and saves as much energy as possible when you are away. Smart thermostats are much easier to use than regular programmable thermostats, which means you will use it more often and adjust it as your schedule changes.

Learning Features

If all smart thermostats could do was enable you to set schedules more efficiently, they wouldn't be very smart. They learn your behaviours and will help you set schedules that save the most energy. Most smart thermostats have a way of knowing when you are home and when you are away either through third-party integrations or geofencing capabilities. They also learn more about your preferences as you keep using the device. Nest, for example, logs the frequency and nature of your interactions with the thermostat to learn what you like.  Over time, these smart thermostats get a better picture of your whereabouts, and they can give you suggestions for optimizing your schedule even further.

smart thermostat app notification about heating schedule and opportunities to save

As well, they learn how long it takes to heat up a room based on the outside temperature and historical data from your own home. The thermostat will know precisely how long it takes to get a room to your desired temperature. This means that they will be able to maximize the duration of the energy saving mode while you are away or asleep.

How to Save Money on Air Conditioning?

A smart thermostat can help! A smart AC controller (a.k.a. a smart thermostat for air conditioners) helps you save on air conditioning just like a smart thermostat helps you save on heating — by making it easy to reduce your energy consumption. Instead of trying to find the remote to change your AC settings, you can control your AC from anywhere on your phone or schedule automatic changes. 

Regular AC unit maintenance and cleaning can also help you save money on air conditioning. But, it can be hard to keep track of AC maintenance. With smart air conditioning control, get reminder notifications on your phone when it’s time to clean your filter! This way, your system stays efficient. 

Energy insights is another smart thermostat feature that helps you save. This app feature shows you a record of humidity, ambient temperature, and runtime. If you notice that air conditioning runs more often in a certain room, it could be a sign that insulation or window sealing should be replaced. After a quick fix, you should see even more savings on your AC bill!

If you’re wondering how to save money on air conditioning, a smart thermostat is the answer.  

Mini Splits

If you own a mini split, it’s likely because of its efficiency. Mini splits themselves can definitely help you save. But, like other heating and cooling systems, controlling them with a smart mini split thermostat can help you save even more! A smart AC controller gives you full heating and AC control of your mini split and comes with a ton of smart energy-saving features.

How Much Money Can a Smart Thermostat Save?

This is a tricky question to answer, and it depends on a lot of different factors such as your current heating system, your location, the size of your rooms and your behaviour. Let's start by establishing some basics; heating your home accounts for 41 to 63 percent of your total energy bill. Nest, one of the leading smart home companies, released a white paper stating that smart thermostats lower heating bills by an average 12% while Nest's main competitor, Ecobee, estimates savings to be as large as 23%. The truth is likely to be somewhere in the middle.

Small Wins

It is important to realize that a smart thermostat can only save you money within the boundaries you define. This is a small wins game where many small wins add up to substantial energy savings. For every degree Celsius (1.8 F) you lower the temperature for 8 hours, you save 2% off of your energy bill. This doesn't seem like much but consider this example:

Let's assume you leave your home for about 9 hours every day, and that you sleep 7 hours a day. Heating a room takes some time so we will account for that in our calculation. If you lower the temperature by 8 degrees Celsius during the day, and by 4 degrees Celsius at night, you will save about 18% off of your heating bill. *

Not Every Home(owner) is Equal

Total savings depend on the specific situation, and it is difficult to give an estimate that will be accurate for every homeowner. However, here are some cases or scenarios where smart thermostats are most beneficial.

  • For homes with separate thermostats controlling different heating zones (think floors or even rooms), energy savings will be higher because you have more granular control over which rooms are heating. For example, you don't need the guest bedroom to be as warm as your own bedroom, unless you have a guest.

  • The colder the climate, the more you can save on energy by lowering the temperature during the day or at night.

  • The higher your energy rates, the more you can save by using a smart thermostat because every percentage you save equals a larger amount of money.

  • For vacation homes, cottages and cabins, smart thermostats work well because you can ensure heating is off (or to a minimum) when you are not there. As well, you can start heating your vacation home before your arrival so you can actually take off your jacket when you enter the property.

Final Thoughts

Admitted: you can achieve most of the same benefits with a regular (non)programmable thermostat, but it takes a lot of effort. Unless you are incredibly diligent about adjusting your programmable thermostat' schedules and temperature settings, smart thermostats make a lot of sense for your wallet. I have lived with Mysa's smart thermostats for the last two months now, and it has surely made an impact on how I go about heating my home. I'm no longer wasting money heating an empty home. At this point, I wouldn't even be able to tolerate any regular thermostats, and I like that I can lower my utility bill right from my smartphone.

* Calculation Specifics:

  • 2% per degree per 8 hours  = 0.25% per degree per hour

  • Lowering the temperature 6 degrees for 8 hours (day) would save you 6 * 8 * 0.25 = 12% on your energy bill

  • Lowering the temperature 4 degrees for 6 hours (night) would save you 4 * 6 * 0.25 = 6% on your energy bill

  • Combined, you'll save 18%

by LastSale
by LastSale