More and more people are choose to use smart home technology to improve every aspect of home ownership, either by adding convenience or by adding efficiency.
Smart thermostats offer both convenience and efficiency by increasing your energy savings and reducing energy costs. Continue reading to learn whether smart thermostats are a worthwhile investment.
To answer the question, “how much money do smart thermostats save?” We first need to explain how smart thermostats work and how they reduce heating and cooling costs.
Key Point: While the exact amount of money saved by a smart thermostat will depend on how much energy your home typically uses, we can give you an accurate estimate of how much money you could save.
Table of Contents
- What is a Smart Thermostat?
- Will a Smart Thermostat Save Energy?
- How Much Money will You Save?
- Is a Smart Thermostat Worth the Money?
- Other Ways that Smart Thermostats Save Money
What is a Smart Thermostat?
Smart homes provide home owners with immense convenience and an improved user experience (check out our complete smart home guide here).
Specifically, a smart thermostat is a programmable thermostat that uses a variety of technologies to monitor and regulate your home heating and cooling costs.
These smart devices often link up to your smart phone or smart home hub device, so that you can control everything even when you’re away from home. Smart thermostats typically offer more features and functionalities than regular programmable thermostats.
Key Point: Because of their increased feature-sets, smart thermostats offer both better control and greater money saving potential.
Features of Smart Thermostats
Here’s some smart thermostat features and technologies that distinguish them from older models:
- An advanced temperature sensor to better monitor home temperature.
- A remote sensor can measure air quality in different parts of your home.
- Touch screen with LED lighting allow for easy operation.
- An energy saving mode decreases heating and cooling to a minimum to save energy.
- Feedback is provided by some smart thermostats, suggesting ways to better use energy.
- Data analysis functions allow a smart thermostat to analyze energy consumption based on different factors related to your home’s heating and cooling schedules.
Summary: A smart thermostat provides superior control and more options for temperature settings, which helps to reduce wasted energy and can create significant savings.
Will a Smart Thermostat Save Energy?
While a smart thermostat is ultimately under the control of the home owner, when used responsibly and with energy savings in mind, they will offers greater potential savings (in terms of money and energy) than average savings of traditional thermostats.
But there are some important factors that will impact your home’s energy consumption:
- Geographic location and altitude
- How often the house is inhabited
- Type of home and the materials it’s made of
- Number of people living in the house
- How often the house is inhabited
- Number of windows and quality of insulation
- Heating and cooling preferences
- Any other energy saving devices in the home
For example, a small well-made home with one individual who rarely uses their HVAC system will have smaller room for improvement. In other words, they may not be able to increase they energy savings by much.
However, for a family of four living in a climate where the air conditioning must run constantly, the potential for energy savings is much higher.
Key Point: Generally, the more your household uses your HVAC system and the higher your energy bills are, the greater the potential for energy savings. Because there is more room for improvement.
How Much Money will You Save?
There is no an exact answer to this question, because how much money you will save depends on your energy costs and what improvements you can make. And this will depend on your own home and the variety of factors described in the section above.
That being said, we have enough data to paint the picture for you. Here’s what we know:
- As of 2021, the average yearly energy bill was $1,409.52 per household.
- This amounts to a monthly average cost of $117.46.
- Smart thermostat manufacturers report savings on energy bills of anywhere from 10% – 23%.
So what do these savings look like? Here’s how much money you can save on your energy bills:
|Monthly Energy Bill||Monthly Savings||Yearly Savings|
|Energy Bill – $75||$7.50 to $17.25||$90 to $207|
|Energy Bill – $100||$10 to $23||$120 to $260|
|Energy Bill – $200||$20 to $46||$240 to $552|
|Energy Bill – $300||$30 to $69||$360 to $828|
|Energy Bill – $400||$40 to $92||$480 to $1,104|
Summary: Energy savings increase multiplicatively with energy consumption, meaning that the more energy you use the more money you can save with better energy efficiency.
Is a Smart Thermostat Worth the Money?
The clearest answer we can give is that a smart thermostat is certainly worth the money if you need to save energy. Of course, it all depends on how much energy your home consumes.
Additionally, you’ll need compare potential energy savings to the cost of installation and the price of the smart thermostat itself. The primary cost of installation is the installation of what’s called the C Wire, which links a smart thermostat to the home’s HVAC.
Here’s a breakdown of some costs to consider:
- Average installation costs of smart thermostat – $200 to $500
- Low-end smart thermostat – $50 to $75
- Mid-range smart thermostat – $100 to $150
- High-end smart thermostat – $200 to $300
- High-end smart thermostat with warranty and service plan – $500
- Total price of $250 to $1,000
Whether smart thermostats are worth the money will come down to these factors:
- Energy usage
- The cost of the model you buy
- The cost of installation
- Energy efficiency
If your energy usage is really high (such as a monthly bill of $300) then even more expensive smart thermostats will save you money in the long term. And if you really boost your energy efficiency, you could even seen a positive return on investment within the first year.
If your home is smaller and consumes less energy, then it may take more time to recoup the investment.
Key Takeaway: Smart thermostats are always almost worth the money if your home has high energy usage and you’re willing to use energy-saving features.
Other Ways that Smart Thermostats Save Money
One other commonly missed benefit of smart thermostats is that they save money in other ways. Specifically, some states offer money-back rebates for homeowners who invest in energy saving devices.
Here’s the states that offer monetary assistance or rebates for purchasing smart thermostats for your home:
- New Jersey
- New Mexico
- New York
- North Dakota
- Rhode Island
- South Dakota
- West Virginia
Conclusion: If you live in one of these states, smart thermostats can most assuredly save you money, since these states help with the initial cost. Thus it takes less investment to lower your utility bills and ensures that you see a return on your investment sooner.
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