How smart thermostats actually save money

How smart thermostats save energy 

A smart thermostat doesn’t heat or cool your home more efficiently than a standard one. Your furnace and air conditioner do the same amount of work either way. The savings come in when you run the equipment less, specifically during the hours when no one is home to benefit from it. Every minute your HVAC system isn’t heating or cooling an empty space is a minute you aren’t paying for. How does it work?

Occupancy detection and geofencing 

Most smart thermostats use built-in sensors or your phone’s location to figure out when your home is empty. Geofencing tracks when you leave a set radius around your house and shifts the temperature to an energy-saving setting, then adjusts back before you’re expected home. Some models add motion or door and window sensors to catch activity room by room, which helps in situations a phone’s location alone would miss, like someone working from a home office all day. 

Routine learning and remote control 

Many smart thermostats also build a schedule from your actual habits using learning algorithms, instead of requiring you to program one by hand. That distinction matters quite a bit. Back in 2009, the EPA suspended ENERGY STAR certification for programmable thermostats, in large part because most people never set a schedule on them, so the devices delivered little of their theoretical savings.  

However, in 2017, the EPA introduced new standards for Wi-Fi-enabled smart devices, and ENERGY STAR certification for smart thermostats was once again available. Why? Because newer technology and Internet connectivity meant that the thermostat could learn a user’s routine more accurately in real time. Remote access through a phone app closed another gap: if plans change, you can adjust the temperature from anywhere instead of paying to cool an empty house until you get home. 

If you’d rather set your own schedule than rely on automation, setting your thermostat efficiently may still deliver some savings without needing a smart device. However, automation ensures that forgetting to make manual updates won’t show up as sticker shock on your next utility bill. For a broader look at what else can be automated around your house to increase savings, see our guide to smart home energy devices.

How much can a smart thermostat save?

ENERGY STAR reports that certified smart thermostats save the average household about 8% on heating and cooling costs. Actual savings vary based on factors such as your climate, home size, HVAC efficiency and energy use.

Other savings estimates can look different depending on what’s being measured, the thermostat features being used and the household. Here are a few benchmarks to put potential savings in context:

• 8%: The average savings on heating and cooling costs reported by the EPA and ENERGY STAR, roughly around $50 a year

• 10%: The amount saved by scaling your thermostat forward or back 7 to 10 degrees, according to the US Department of Energy

• 1-2 years: The amount of time estimated to make back the cost of purchasing a smart thermostat, according to CNET

• $50-$100: Estimated savings from instant rebates through your utility provider; check ENERGY STAR’s rebate finder for more information

What skews the numbers

Brands like Google Nest, ecobee, Honeywell Home and Vivint often publish their own savings estimates, with figures that tend to run higher than the ENERGY STAR average. But that isn’t usually a red flag. Larger sample sizes across more climate zones, combined with features like occupancy sensing and geofencing that go beyond the ENERGY STAR baseline, can produce real, larger savings for many households. The catch is that manufacturer figures usually represent averages or high-level results from their own field studies, not a number every household should expect. Many factors will impact your actual savings, including:

• Your climate

• The size of your home

• The energy efficiency of your existing HVAC equipment

• Which smart home devices you’re using

• Your occupancy patterns and habits

• Whether you qualify for a demand response program

• The upfront cost of purchasing and installing your smart thermostat

• Your overall energy consumption

All of these factors will play a role in how much you can expect in annual savings, and what you’ll see on your monthly heating and cooling bills.

Layer on demand response for added savings

Saving on energy bills isn’t just about replacing a traditional thermostat with a smart one. Demand response programs help reduce electricity use when demand on the grid is high, and some offer financial incentives for participating. A smart thermostat can make participation easier by responding to certain demand response events automatically.

How smart thermostat savings can work together

A smart thermostat can help reduce wasted heating and cooling on its own. But combining a smart thermostat with connected sensors, automation and an energy program can create additional opportunities to save.

That’s the idea behind the Comfort IQ™ bundle from Reliant. It combines a fixed-rate Reliant electricity plan with a Vivint Smart Thermostat, connected sensors, a security hub and free professional installation. The thermostat can make automatic adjustments to help reduce wasted heating and cooling, while the Reliant Degrees of Difference program can make small adjustments during periods of high electricity demand.

What could that add up to?

With the Comfort IQ bundle, customers can enjoy hundreds in estimated annual energy savings. The estimate combines a $40 Degrees of Difference bill credit for customers who meet the program’s participation requirements with estimated HVAC-related energy savings from using Vivint Smart Comfort.¹

Common myths about smart thermostat savings

A few misconceptions come up often enough that they’re worth addressing directly.

Myth #1: Any smart thermostat saves the same amount.

Reality: Hardware differences matter less than which features you actually use. A thermostat with strong occupancy sensing and geofencing, whether it’s a Vivint, Google Nest, ecobee, or Honeywell Home model, will typically outperform a basic Wi-Fi thermostat that only replicates a traditional programmable schedule online. The savings coming from the features in use, not the brand name on the display.

Myth #2: Savings are guaranteed.

Reality: Every savings figure in this article, including ENERGY STAR’s and the DOE’s, is an estimate, not a promise. Actual results vary by household. 

Myth #3: You have to babysit the settings on your smart thermostat.

Reality: Once a smart thermostat is set up with occupancy sensing and enrolled in a demand response program, it needs very little ongoing attention. The whole point of automation is that you shouldn’t have to think about it in order to see the benefit.

Put smart thermostat savings on autopilot

Smart thermostat savings work best when the technology does more of the work for you. Occupancy sensing can help reduce heating and cooling when nobody is home. Smart Comfort can automate temperature adjustments around occupancy and schedules. Degrees of Difference adds another opportunity to lower usage during certain periods of high electricity demand.

The Comfort IQ bundle brings those pieces together. It includes a Reliant fixed-rate electricity plan, Vivint smart home devices and professional installation, Vivint Smart Comfort and participation in Reliant Degrees of Difference. The result is a connected approach designed to help your home respond to how you live while giving you opportunities to save energy automatically.