Do Smart Thermostats Save Money

Sometimes you have to take the claims of companies who push their product as “the best” or “money saving” with a grain of salt. So when a smart thermostat company (Nest Learning Thermostat) claimed to save customers hundreds of dollars, I had to investigate.Why You Should Buy a Learning Thermostat

I decided to purchase the Nest Thermostat when it went on sale on Amazon in the lead up to the holidays for two reasons:

1. Google believed in it to the point of purchasing the company for $3.2 billion in 2014. If Google is willing to invest that much in a company, they must see a ton of potential in expanding the brand or the technology it uses.

2. It is a learning thermostat which means it will learn your habits and adjust temperatures in the home – which in the long run can save you money. It uses data that is collected by sensors (to detect your presence or absence from the home) and the interactions you have with the thermostat (i.e. your preferred temperatures).How the Nest Thermostat Saves You Money

My family lives in Canada – we have four distinct seasons so weather can vary month to month which also means our heating bills vary over the course of the year.Due to an initiative to go green, several of the utility companies in my city have pushed for paperless billing. An added feature of moving everything online (via their billing portal systems) is being able to provide users with a little more insight into their usage. For natural gas, we’re able to see our family’s usage in comparison to similar sized homes in our area.

The above chart shows our natural gas usage in 2014 compared to similar sized homes and “efficient” homes. In 2014, we used more natural gas that similar homes – especially in the colder months.

The chart above is our usage in 2015. The beginning of the year shows we were using 140 m3 more natural gas than “efficient” homes in the area. After the Nest Thermostat was installed in July 2015, we still continued to use more than an “efficient” home however the difference was much smaller (October and onward) than the beginning of the year before the Nest was installed.

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More specifically I’m using 70 m3 more than an efficient home instead of the 140 m3 more that I was using earlier in the year. Basically I’m saving money on my natural gas usage!!

Our electricity service provider has similar graphs which shows our usage against similar sized home within our area. Below is a look at electricity usage during 2014 during the warmer months when we tend to use the air conditioning.

In general our usage was OK compared to others during the warmer months. We used more electricity than 47% of similar homes in our neighbourhood, but still used less than 44% of other homes.

After we installed the Nest however, for the same period in 2015, we were able to inch closer to the usage levels of more efficient homes in the area. We used more electricity than 12% similar homes in the area and less electricity than 65% of other homes.Should You Invest in a Smart Thermostat?

Learning thermostats like the Nest are quite spendy – the base model is $200 at big box stores or online retailers like Home Depot and Amazon. So it will take some time to recoup the costs. It can also be a selling feature when you’re ready to move or rent your place of residence.

If you’re a homeowner that isn’t using a programmable thermostat, investing in a smart one like the Nest will save you money in the long run.

While we’re still on the path to breaking even on the purchase of our Nest Thermostat, at least we’re moving in the right direction to putting more money in our savings account.

The Nest Thermostat is one of the more popular and readily available learning thermostats where we live but we’ve seen many positive reviews for both the Honeywell Smart Thermostat and Ecobee Smart Thermostat.

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