Saving Money With The Smart Thermostat

While smart thermostats can save you a good deal of money, you might not be using them the best way possible.

By following a few basic tips, you could actually double or triple your savings over what you might have otherwise gotten.

Now you shouldn’t get carried away thinking you’ll not use any energy because the thermostat is so much more efficient than your current model.

However, you can save upwards of 10-12 percent over what you might be spending now.

How Do Smart Thermostats Work?

Traditional thermostats use feedback circuit to measure the internal temperature of your home. These traditionally had two settings. When furnace mode was activated, the unit would automatically call for the heat once the temperature dropped below a certain point.

The reverse is true when you activated the cooling mode. While some of these units included computers to allow you to program in a schedule, they were still incapable of making any kind of judgment call themselves.

Smart thermostats use an artificially intelligent computer algorithm to figure out what the best possible settings are for the current situation even if these might not be what you set.

If the thermostat feels that the AC or furnace is being used too much, then it can compensate for this by making an adjustment. This means your HVAC system runs for less time, thus it reduces how much energy you use. These features in particular help to save you energy and money:

  • Location detection tells if people are in the home and if they really need it warmer or cooler
  • Smart thermostat knows HVAC system efficiency and considers it when to turn the system on and off to reach the most comfortable temperature for just in time
  • Weather forecast readouts can automatically adjust for warmer or cooler weather
  • Notifications can alert the user if the current settings are in any way wasteful or any part of the heating or cooling system requires maintenance to work efficiently (e.g. air filter replacement).

How Much Money Can You Save?

The amount of money you save depends at least in part on the type of HVAC system you have. Those who have electric furnaces often stand to save the most, as these systems can cost the most to run.

If you have a boiler that uses home heating oil, then you also stand to save a substantial amount of money beyond what even companies like ecobee and Nest Labs claim in their marketing copy.

Most organizations, including these and Honeywell, claim that their smart thermostat units can slash energy usage by up to 10 percent.

What might be surprising about these claims is that they’re actually rather conservative compared to numbers that have come out of independent studies.

Independent studies by the United States Department of Energy show that some homeowners can save 10 percent annually simply by turning a traditional thermostat 10°F up or down for eight hours a day.

They did admit that the savings from this setback were less drastic in mild climates, but they also noted that setting a thermostat to 68°F during the day in winter in most climates contributed to savings as well.

Technologists from Energy Star tested power distribution networks going to households, and they found that around 42 percent of home energy use goes to the HVAC system.

They then found that while programmable thermostats could slash this considerably, most people use them wrong – slightly more than 40 percent of households drop the heat down during the evening hours in winter. Almost nobody shut it off, even when it would have been safe to do so.

What Factors Help Save Money?

These studies help to show that more aggressive settings can save more money. More than likely, you’ll find these are an influence on how much you save in your local area:

  • Heating and Cooling Patterns: If you’re already using your existing thermostat to the fullest possible degree, then you might not get dramatic savings.
  • Cost of Utilities: In some areas, the cost of fuel and electricity are simply lower than in others.
  • Local Climate: More extreme climates call for more extreme usage of HVAC systems, so you’ll save more in these compared to somewhere mild.
  • Home Energy Efficiency: Pair a smart thermostat upgrade with the installation of some new insulation for the best outcome.
  • HVAC System Type & Performance: Heat pumps tend to be more efficient than electric furnaces, for instance. Then again, users of inefficient systems might have the best results since they stand to save more by dialing down their usage.
  • Correct Usage: You might not get the most out of your thermostat if you don’t configure all the settings properly to begin with.

One particular independent study found that people in New York City were able to save anywhere from $76-352 while consumers in San Francisco saved as little as $17 annually.

Some consumers with electric heating in the San Francisco area were saving upwards of $221, so there’s a pretty big window when it comes to total savings.

Keep in mind that if you’re someone who prefers to open the windows all the time and keep the HVAC system off as much as possible it probably won’t matter what kind of thermostat you use since you’re probably not using much energy to begin with.

Tips for Saving Money with a Smart Thermostat

The good news is that you can easily readjust your smart thermostat to save more energy if you’ve been using it wrong. There are four primary ways you may be misusing your smart thermostat and it’s easy to fix each:

  • Trying to work too quickly: Your home won’t get down to 77°F any faster if you have it set to 69° instead of 77° since your unit only works at a single speed. Allow your smart thermostat to switch the system off for most of the time, then start heating or cooling your system around 10 minutes before you get back home.
  • Changing settings too often: If you’re micromanaging your thermostat, then you might be forcing your HVAC system to turn and off far too much. Letting them run for a long steady time and then shut off for a long period of time will be more efficient. This is the default way that Nest, Honeywell and ecobee smart equipment manages HVAC systems.
  • Not giving the thermostat authority: This is every bit as bad as using a regular thermostat and leaving it at the same setting all of the time. Allow your smart thermostat to make changes to your schedule. You can always adjust them later if you don’t care for them.
  • Forgetting about your usage patterns: You own usage patterns can waste energy. If you’re setting your thermostat upwards of 89°F in the winter and 61°F in the summer, then there’s no way that a smart thermostat can save power. These settings are common in some areas, but they’re outside of what’s considered ideal.

Learning thermostats, regardless of who makes them, use motion sensors to detect when you’re there. Don’t be afraid of them turning off the HVAC system when you’re not around.

You’ll eventually get to a point where you can leave them alone since they’ll automatically choose the most efficient settings possible.

Most people can’t perceive a temperature shift of only a few degrees, so you might find that your new thermostat uses this fact to save a little money as well.

You could do this manually as well. If you prefer heating the house up to 70°F, then try a few days worth of 68° and see what happens. You might not even be able to notice the difference, especially if you’re dressed appropriately for the weather.

Does it Make Sense to Upgrade to a Smart Thermostat?

Consumers who are already using a programmable thermostat shouldn’t need to upgrade to a smart thermostat if they’re using it correctly.

You can achieve many of the same benefits with a traditional programmable unit, especially if you make sure to dial the temperature up or down while you’re asleep or not home.

However, the different story would be for homes with conventional (non-programmable) thermostats. An average home can save quite significant amount of money when upgrading to the smart thermostat. For example, the Nest learning thermostat will pay for itself halfway through the second year.

Likewise, those who don’t like to use their furnace or AC unit very much won’t see any real benefit. However, these units should pay for themselves fairly quickly in most other use cases.

Users in extreme climates or those with particularly inefficient HVAC systems will stand to see the biggest savings. If you don’t mind doing the upgrade yourself, then you can stand to save even more money.

This doesn’t mean you have to be technologically inclined at all, because all it takes to install a smart thermostat is screwing in a handful of wires.

Consumers who cut out the middleman like this start saving right away since they don’t have to pay an installer’s fee. If you’re the kind of person who needs to have the house a specific temperature, then you might see a really drastic reduction on your bill when using a smart thermostat.

Depending on your situation, you could save upwards of $400 annually so these savings could theoretically pay for the unit in just a few months.

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