En Español (866) 963-9353
PO Box 975428
Dallas, TX 75397-5428

How Do Smart Thermostats Save Energy and Money

We're Here to Help

Does a Smart Thermostat Actually Save Money on Energy?

Are you trying to decide if you should purchase a smart thermostat? These devices have gained popularity for their potential to improve energy efficiency and reduce heating and cooling costs. As the cost of living continues to rise and many people want to go green, technology that markets it can save money and help the environment is attractive. 

Smart thermostats have been in use for more than a decade, and claim to provide automated temperature control, energy usage monitoring, and remote access, among other features. However, before investing in a smart thermostat, it’s important to understand whether these claims hold true.

Before exploring the money-saving potential of smart thermostats, let’s first review the different types of thermostats so that you can understand your options.


Traditional Thermostats

A traditional thermostat is a simple device that requires manual adjustments whenever you want to change the temperature in your home. You cannot pre-set temperature changes for when you’re away or sleeping. These devices are affordable, easy to use, and ideal for people not often away from home.


Programmable Thermostat 

These devices are designed to adjust the temperature according to a series of programmed settings that take effect at different times of the day. This approach works well for households that have a consistent home and away schedule week to week. Energy Star says a programmable model used correctly can add up to $180 in yearly savings (source).


WiFi Thermostats

These thermostats are often considered “smart” because users can access their thermostats via their smartphone, computer, or tablet. Remote access allows users to adjust the temperature of their home while they are away or simply don’t feel like getting up.


Smart Thermostats 

These devices also connect to the internet and allow users to remotely control and monitor their home’s temperature. Additionally smart thermostats can learn your routine, track the weather outside, and tell you when to change your air filter, and more. 

Now that we know what types of thermostats are available, let’s dive into the benefits of smart thermostats.


How Smart Thermostats Save Energy and Money

One of the primary claims of smart thermostats is that they can lead to energy savings and reduce utility bills. Consumer Reports states that when used properly, smart thermostats can help you save up to 10-15% on heating and cooling costs annually. How is this achieved?


Efficient Scheduling

Smart thermostats allow you to create customized schedules that align with your daily routine. This means you can set different temperature settings for when you’re at home, asleep, or away. However, unlike programmable thermostats, smart thermostats can learn your routine and start making adjustments automatically. You can reduce energy consumption and save money by avoiding unnecessary heating or cooling when your home is unoccupied.


Geofencing and Remote Sensors

Geofencing is another feature that can enhance energy savings. Smart thermostats create an area around your home called a geofence that acts like a boundary. The device can detect when you leave or approach that zone. It can then automatically adjust the temperature settings based on your proximity, ensuring optimal comfort while minimizing energy waste. 

For example, a smart thermostat like Nest can learn how long it takes to cool or heat your home and how much the outside temperature affects the process. As a result, Nest can turn your HVAC system on at the last possible moment before your arrival. Or turn it off at the earliest moment available.

Some smart thermostats work with remote sensors. Sensors can sense the temperature, humidity, and pressure around the device. It then transmits the data wirelessly. This lets you get the temperature right in the right rooms at the right time. For example, if your thermostat is downstairs but your home office is upstairs, and it gets hot, you can place a sensor on your desk so the A/C kicks on when needed. This option doesn’t necessarily save you money; it could increase your energy bill. However, it’s a nice feature to help with unbalanced HVAC systems (source).


Learning Algorithms

Smart thermostats often employ learning algorithms to understand your temperature preferences and patterns over time. As they gather data about your usage, they can make intelligent decisions about when to adjust the temperature, optimizing energy usage.


Remote Access and Monitoring

Like WiFi thermostats, smart thermostats allow you to remotely control and monitor your home’s temperature. This feature is especially beneficial if you need to remember to adjust the temperature before leaving or want to make changes while on vacation. 


Other Benefits of Smart Thermostats

Air Quality

Certain models of smart thermostats can help improve your home’s air quality. For example, ecobee Smart Thermostat has a built-in air quality monitor that alerts you when your filters need changing. The built-in smoke alarm and CO2 detection can notify you of potential hazards. In addition, the device can alert you when indoor air quality is poor and provide tips on improving it.


Design and Aesthetics

Smart thermostats are designed to be attractive. These devices are sleek and modern, with larger numbers and an easy-to-read interface. In comparison, older thermostats tend to be harder to read and bulkier.

While smart thermostats offer numerous benefits, it’s essential to consider potential drawbacks before making a decision.


Potential Drawbacks

Installation and Compatibility

Some smart thermostats may require professional installation, especially if your heating and cooling system is incompatible. This additional cost should be factored in when evaluating the overall savings potential.


Learning Curve

If you are not technically savvy, you may find the initial set up and creating schedules challenging. You will want to feel comfortable using tech to get the most out of smart thermostats.


Connectivity and Dependence on the Internet

Smart thermostats heavily rely on internet connectivity. If your internet service is unreliable or the device loses connection frequently, you may experience difficulties accessing or controlling your thermostat. To fully leverage the benefits of a smart thermostat, it’s important to ensure a stable internet connection. 


Upfront Costs

Smart thermostats generally have higher upfront costs compared to traditional thermostats. However, according to Consumer Reports, the energy savings over time can offset the initial investment. Additionally, many utility companies offer rebates or incentives for installing smart thermostats, further reducing costs.

According to Consumer Reports, some models can connect to programs that allow your utility company to adjust the thermostat settings in exchange for discounts or incentives.

Due to their ability to alleviate grid pressure during peak hours and contribute to meeting vital energy efficiency regulations, electricity providers are actively supporting the adoption of smart thermostats among their customers.


Check out Ecobee online tool to search for current rebate offers in your area.


When a Smart Thermostat isn’t Worth It

If your home doesn’t have central air, or if you use steam or hot water radiators or radiant floors, a smart thermostat isn’t likely to save you much energy or money.

Additionally, if you have an older HVAC system without a C-wire (basically a dedicated power line for your HVAC), you’ll need to select a smart thermostat carefully. Many models won’t work without one. C-wire adapters are sometimes available, but they don’t always work well. And even if a smart thermostat can work without a dedicated C-wire, it won’t always work with very basic two-wire, heat-only systems (source). 

Finally, if you’re home most of the time, you will see smaller savings from a Smart Thermostat and, therefore, might not feel the initial expense to purchase and install one is worth it.


Four Ways to Save on Your Energy Bill With or Without a Smart Thermostat


So, is a Smart Thermostat the best option?

The U.S. Department of Energy estimates you can save 10% on heating and cooling simply by dropping your thermostat’s demands from its typical setting by 7 degrees Fahrenheit to 10 degrees Fahrenheit for eight hours a day. That’s possible without a smart thermostat, though it certainly makes the shift easier (source). 

Ultimately, it’s a personal decision. Although a smart thermometer is not the only way to save money on your energy bill, it’s a great addition to your home, based on your routines and HVAC system.










What our customers are saying

See why our power customers say we're the best electricity provider in Texas!

Affordable and easy to make payments

I was worried about getting electricity for my home through a prepaid company. I was calling around to see different rates then going through all the hassle of credit checks while dropping points each…

Christine M. in Killeen

Happy Customer

I have been with this company for several years and have been very happy since. Even when I moved, they made my usually stressful situation very easy and carefree. I recommend them to everyone that I…

Julia L. in Webster

Long term customer

I have enjoyed the service for 2 years now. In the beginning this service was planned to be temporary but with the service being so effective for me i decided to keep it for the long haul. I’m a happy customer.

Kalandra H. in McKinney