Do Smart Thermostats Save Money? Cost, Savings, and Payback

Yes, for most homes. ENERGY STAR certified smart thermostats have to prove, using a year of real data from hundreds of homes, that they cut heating run time by at least 8% and cooling run time by at least 10%. On a $900 annual heating and cooling bill, about what ENERGY STAR says an average household spends, that's roughly $70–$90 a year. A $130 thermostat you install yourself pays for itself in about 1.5 to 2 years; a premium model with professional installation takes four to seven years.

What a smart thermostat costs

Retailers and the manufacturers themselves often discount these, so you may pay less. Professional installation adds $100–$200, according to HomeGuide. Most smart thermostats need a C (common) wire to stay powered; if your home doesn't have one, which is common with older systems, adding one costs another $90–$135. Installing it yourself is a reasonable DIY job if your thermostat wiring is low-voltage and you turn off power to the system first. Line-voltage thermostats for baseboard heaters need a model made for them.

How much a smart thermostat saves

ENERGY STAR's certification requires a smart thermostat to cut heating run time by at least 8% and cooling run time by at least 10%, measured as the lower bound of a national average. In other words, these are conservative figures, not best cases. Manufacturers claim more: ecobee advertises savings of up to 26% on heating and cooling. The size of your savings depends mostly on your habits before the switch:

• You leave your thermostat at one temperature: you'll likely save the most, since the thermostat can set back the temperature while you're asleep or away.
• You already program setbacks: you'll save less, because you're already getting much of the benefit.
• Your bill is mostly heating or mostly cooling: savings are a slightly larger share of a cooling-heavy bill (10%) than a heating-heavy one (8%).

For context, ENERGY STAR says the average American household spends more than $900 a year on heating and cooling, almost half its energy bill.

Smart thermostats and heat pumps

If you have or are considering a heat pump, choose a thermostat that supports heat pumps with backup heat. A good one will avoid switching on expensive electric resistance backup heat when the heat pump alone can catch up, which is one reason ENERGY STAR requires certified models to report how much backup heat they use. For the very highest-efficiency HVAC equipment, ENERGY STAR suggests a controller from the equipment maker.

Rebates

Many utilities offer rebates on ENERGY STAR certified smart thermostats, and some pay you to join demand-response programs that briefly adjust your thermostat during peak demand. ENERGY STAR's rebate finder lists programs by ZIP code. A rebate can cut the payback period sharply, so check before you buy.

Sources

• ENERGY STAR — Smart thermostats key product criteria
• ENERGY STAR — Smart thermostats
• HomeGuide — Thermostat installation cost
• Google Store — Nest thermostats (manufacturer price)
• ecobee — Smart thermostats (manufacturer price)