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Do Smart Thermostats Save You Money On Your Electricity Bill?

It’s safe to say the future is now. Many consumers are using smart thermostats, which are devices that save you money through tracking and learning your behaviors. Although these devices seem like the beginning of I Am Legend, we have to wonder, can they save you money on your electric bill?

Smart thermostats can save you money on your electricity bill. Some families have seen returns of $50 a year, while others have seen over $150. These devices save money by learning and tracking your behaviors. The amount you can save with a smart thermostat will vary, as every home is different.

If you’re hoping to save big with a smart thermostat, you may or may not be in luck. The amount you can save with a smart thermostat depends highly on your location, home, schedule, and more. So, is a smart thermostat a wise investment for you and your family? Read on for everything you need to know.

What is a Smart Thermostat?

Smart Thermostat with a hand saving energy

To understand how smart thermostats save you money, you first need to understand what they are and how they work. There are three main types of thermostats: non-programmable, programmable, and smart thermostats.

Non-Programmable Thermostats: Non-programmable thermostats are traditional and dated. Most of us are familiar with this type of thermostat. These thermostats allow you to manually adjust temperature levels within your home.

Programmable Thermostats: One step above traditional thermostats are programmable options. These thermostats allow you to heat and or cool your home at certain schedules and intervals. These thermostats are programmed manually and do not have mobile connectivity. Many homeowners have found programmable thermostats to be clunky and frustrating to use.

Smart Thermostats: Finally, we have smart thermostats. Smart thermostats connect to the internet via WiFi. These devices allow you to control your home’s temperature via phone apps or from the internet. Some smart thermostats have machine learning algorithms, allowing them to find and set the most efficient schedules. Additionally, smart thermostats can connect to devices such as Amazon Alexa, Google Home, and Apple HomeKit.

Are Smart Thermostats Better Than “Dumb” Thermostats?

Smart thermostats have more capabilities, controls, and features than “dumb” thermostats. Programmable and non-programmable thermostats lack these features and can be clunky in design.

Let’s say you left for a family vacation and forgot to turn off the thermostat. With a smart thermostat, you can simply open an app and regulate your home. Or, your smart thermostat may recognize you’re away from home and adjust the temperature for you.

With programmable thermostats, this option isn’t available. For these reasons, smart thermostats are considered better than their counterparts.

How Do Smart Thermostats Save Money?

The days of setting and forgetting your thermostat are long gone. Nowadays, we have smart thermostats that learn your behavior, resulting in more efficient heating and cooling. These devices can save you money through structured scheduling, learning your preferences, and more.

Smart Thermostats Learn Your Behavior

Smart thermostats learn your behavior through a combination of algorithms, scheduling, geofencing, and motion sensing. All of these components work together to determine the most efficient system.

By Setting Efficient Schedules

Smart thermostats use all the data gained from your behavior to set efficient schedules that save money. Your thermostat pays attention to your schedule, and it may know when you’re away from home or at work. This information allows your smart thermostat to set heating and cooling schedules that work with your routine.

For example, your smart thermostat could recognize when you’re getting ready for work and when you leave. This information allows your thermostat to warm the house as your prepare for the day and turn off the system when you’re gone.

Smart Thermostats Use “Away Mode.”

Most smart thermostats have an “Away Mode.” This feature allows your thermostat to adjust the temperature while you’re out of the house. Your smart thermostats may use motion sensing, geofencing, and schedule to determine when you’re away.

For example, if you’re at work from nine to five, your thermostat will adjust the temperature accordingly. This feature is best suited for those who frequently leave the house. If you work from home, you may not receive as many benefits from your smart thermostat.

By Tracking Your Preferences

Smart thermostats can save you money by tracking your preferences over time. For instance, your smart thermostat will notice if you set your home’s temperature to 75 F every night before you go to bed. The thermostat may decide to set this temperature for you, make a suggestion through an app, or gradually raise/lower the temperature before you usually set it.

Smart Thermostats Learn Your Environment

Did we mention smart thermostats track and learn your behavior? One way these devices save you money is by tracking how long your home takes to heat up/cool down based on the environment.

Your smart thermostat will know how long it takes to get a room to a certain temperature depending on the time of year. This allows your thermostat to accurately gauge when to heat/cool your home.

Do Programmable Thermostats Save Money?

Smart thermostats may not appeal to everyone. Having a device track and learn your behaviors is similar to HAL 9000 from 2001: A Space Odyssey. Fortunately, programmable thermostats can save consumers money.

If you have a consistent schedule and time, programmable thermostats can still be a viable energy savings option. In fact, ENERGY STAR suggests homeowners can save upwards of $180 a year with proper programming. Simply set your heating and cooling schedule for the week.

However, this solution is a bit more involved, as you’ll frequently be adjusting your thermostat.

How Much Money Do Smart Thermostats Save You?

Smart Thermostat with a person saving energy with a smart device on a white background

The most important question of all might be, “How much money can you save using smart thermostats?” Unfortunately, it’s hard to determine an accurate answer to this question.

How much money you save with a smart thermostat depends on your home, location, behavior, and more.

The Nest Learning Thermostat Can Save Up To $150 a Year.

The Nest Learning Thermostat is one of the most popular smart thermostats on the market. According to their studies, this thermostat saved 10% to 12% on heating and 15% on cooling.

Based on these savings on typical energy costs, you may be able to save up to $150 a year. Meaning, the Nest Learning Thermostat will pay for itself in under two years.

Amazon’s Smart Thermostat Saves $50 Annually.

Amazon’s Smart Thermostat (on Amazon) is incredibly affordable at only $60, making it another popular option. This thermostat is ENERGY STAR certified, meaning it has to save a minimum of $50 a year.

Meaning, you’ll be saving at least $5 a month, and the device will pay for itself in just over a year.

Ecobee Smart Thermostat Can Save Up to 26% Annually.

Another popular device is Ecobee’s Smart Thermostat. Ecobee claims their smart thermostat can save homeowners upwards of 26% annually.

Although the average utility cost varies, Ecobee’s Smart Thermostat could be saving homeowners $100 to $300 a year.

Consumers Are Saving Through Rebates

It’s no surprise that smart thermostats can be expensive. Some models cost over $200! Fortunately, one of the ways consumers are saving money with smart thermostats is through rebates. Rebates are partial refunds on taxes, utilities, or other expenses.

Smart thermostats reduce the strain on the grid and help electricity providers meet energy mandates. Because of these benefits, many companies offer rebates for smart thermostats. For example, Ecobee has a free online rebate finder tool.

Is A Smart Thermostat Worth It?

Finally, we reach the most important question of them all: Is a smart thermostat really worth it? With the learning algorithms and energy savings, you would think smart thermostats are a safe investment, right? This assumption may not always be true.

We know smart thermostats provide homeowners with a wide array of benefits. Some of these benefits can include:

  • Mobile Connectivity
  • Smart Home Compatibility
  • Tracking and learning behaviors
  • Simple designs
  • “Away Mode,” scheduling, zone control, and other features

Although smart thermostats come with their fair share of features, we have to wonder if the price tag warrants the savings. Some models cost upwards of $250, making them a hefty investment.

So, what’s the final verdict? Will a smart thermostat be worth it to you and your family?

Smart thermostats can save you money on your electricity bill. However, the amount you can save varies greatly from house to house. Some families will reduce their utility costs by $50 a year, while others may see returns of $150.

Each home, family, and location will use different amounts of energy, so your mileage will vary.