Do Smart Thermostats Save Money?

Man in sweater feeling cold adjusting room temperature with electronic thermostat at home.
RossHelen / Getty Images/iStockphoto

A smart thermostat is a digital programmable thermostat that connects to a home’s Wi-Fi or Z-Wave, a wireless network used by some smart homes, to provide automation features that can help save homeowners money on energy bills.

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For instance, some smart thermostats can detect when a house is unoccupied and adjust the temperature accordingly or use a homeowner’s phone GPS to know when to adjust the temperature to a more comfortable setting before they arrive home. Some send the homeowner a monthly energy usage report so they can make adjustments to improve energy efficiency and lower energy bills.

These extras come at a cost. Whether basic or sophisticated, smart thermostats typically cost more than analog or digital thermostats. So are they worth the installation cost, and how much can they save?

Do Smart Thermostats Save Money?

According to Consumer Reports, yes — a smart thermostat is a worthwhile investment that can help keep energy costs in check. They can automatically make energy-efficient temperature adjustments throughout the day, adding up to savings over time. Some have advanced features, such as room temperature sensors that can help better balance the temperature throughout the home. But not everyone will save.

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Anyone with already low energy costs may not save much more with a smart thermostat. Either the home does not require much heating or cooling, or the HVAC system is already operating near optimal energy efficiency. Homes with climate-control systems other than central air conditioning or a furnace may not save much since smart thermostats don’t work well with these alternate systems. Also, some people can save enough money with a programmable digital thermostat making the higher cost of a smart thermostat unnecessary.

How Much Money Do Smart Thermostats Save?

The reported savings of smart thermostats vary, but here are savings stats from three different sources:

Saving Stats

  • According to ENERGY STAR, “Homes with high heating and cooling bills, as well as homes that are unoccupied for much of the day, can save approximately $100 a year with an ENERGY STAR certified smart thermostat.”
  • A study by ecobee, a smart thermostat manufacturer, revealed their smart thermostat users in North America save up to 26% on energy costs.
  • Another independent study found that Nest thermostats save users an average of 15% on cooling and 10 to 12% on heating.
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What Are the Pros and Cons of Smart Thermostats?

To better determine whether a smart thermostat is a worthwhile investment, consumers should consider the following pros and cons:

Pros

  • Smart thermostats are programmable, so energy isn’t wasted when someone forgets to adjust the thermostat.
  • Smart thermostats can be controlled remotely, typically through an app on a mobile device.
  • A smart thermostat can send a reminder when it is time for the filter to be changed or the HVAC system is due for maintenance.
  • Some smart thermostats have features that can help a homeowner determine the optimal temperature settings for energy efficiency and comfort during various times of the day and night.

Cons

  • Some older homes might not have the necessary wiring to accommodate a smart thermostat.
  • Households that are always occupied, either by people or pets, won’t benefit from some smart thermostat features, such as adjusting the temperature when the home is unoccupied.
  • A smart thermostat could potentially be hacked, and thermostat settings could reveal to a hacker the times when no one is typically at home.
  • Smart thermostats are more expensive than other types of thermostats.
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Will a Digital Thermostat Save on Energy Bills?

A properly programmed digital thermostat can help save on energy bills since it removes the need for manual adjustments to keep the home at an energy-efficient temperature. Homeowners can often get the same savings with a programmable digital thermostat, but at a lower cost. Those with an analog thermostat who don’t want or need the ability to access thermostat settings with an app or the added features of a smart thermostat might consider installing a digital thermostat.

Are Smart Thermostats Worth It?

Whether a smart thermostat is worth it or not depends on the home and the homeowner. According to HomeAdvisor, the average smart thermostat costs $100 to upwards of $500, with some systems exceeding $1,000. A programmable digital thermostat typically costs between $20 and $150.

Most people are too busy to adjust a thermostat manually throughout the day for energy efficiency. A digital option, programmed to the optimal energy-efficient settings, can be a money-saver. For many folks, a digital programmable thermostat can save as much money as a smart thermostat. But those who have out-of-control energy bills or frequently need to adjust temperature settings remotely might find a smart thermostat well worth the cost.

Our in-house research team and on-site financial experts work together to create content that’s accurate, impartial, and up to date. We fact-check every single statistic, quote and fact using trusted primary resources to make sure the information we provide is correct. You can learn more about GOBankingRates’ processes and standards in our editorial policy.

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About the Author

Andrea Norris has been in the web publishing business for the past 15 years both as a content contributor and a copy editor specializing in personal finance, frugal living, home and auto topics. She writes both short and long-form content and is well-practiced in SEO keyword research and writing.
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