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Why a smart thermostat is a good investment

People in the frozen wasteland of Massachusetts could save a lot of money by buying smarter thermostats.
People in the frozen wasteland of Massachusetts could save a lot of money by buying smarter thermostats.
Bill Greene / Boston Globe / Getty

The average American household using natural gas is projected to spend $649 on heating this winter. Americans in the coldest states, and those who heat their homes with more expensive fuels like propane or heating oil, will pay a lot more than that.

These households can save around 10 percent on heating if they turned down the temperature in the middle of the day (when everyone is at work or school) and at night (when people can throw an extra blanket on the bed). Similarly, households in warmer climates could save on air conditioning costs in the summer if they turned the temperature up when no one was home.

For decades, there have been programmable thermostats designed to help people do this. Unfortunately, these products are so complex and cumbersome that many of the people who have them don't actually use them.

But a new generation of smart, internet-connected thermostats promises to change that, making the energy-saving potential of smarter thermostats a reality. This type of Thermostat was pioneered by Nest, a startup that was acquired by Google for $3.2 billion last year. Honeywell, one of the biggest names in the thermostat business, created its own Nest-like offering last year.

Instead of forcing users to program a weekly schedule — a process many users find confusing and time-consuming —these thermometers program themselves automatically based on users' movements and temperature adjustments. And they have other neat features, like the ability to change your home's temperature using a smartphone anywhere in the world.

Programmable thermostats can save a lot on your gas and electric bills

The Lyric is Honeywell's flagship smart thermostat. (Honeywell/The Verge)

If you have an old-fashioned mechanical thermostat, your furnace (or air conditioner in the summer) is doing a lot of unnecessary work. It keeps your home at the same temperature all day, even when everyone is at work or school. And it keeps the temperature up at night, even though you might be just as comfortable with a lower temperature and an extra blanket. If you turn down the thermostat during these times, you can save a lot of energy — and money.

The result, according to the Energy Department, is savings of roughly 1 percent for every 1 degree (Fahrenheit) the temperature is reduced overnight.

Nest invented a programmable thermostat you don't have to program

The Nest Learning Thermostat. (The Verge)

Until recently, programmable thermostats were so difficult to use that a lot of people who owned them (almost half, according to one estimate) didn't bother to program them. And those who did didn't necessarily do it very well.

Nest set out to change that with its learning thermostat. Like a conventional programmable thermostat, it can be programmed to automatically raise and lower the temperature to maximize comfort and minimize utility bills.

But rather than forcing users to manually enter a schedule for increasing or decreasing the temperature, the Nest thermostat observes user behavior and tries to anticipate the user's schedule. If people are regularly raising the temperature at 6 am, the Nest thermostat will start doing that automatically each morning. If someone comes home while Nest is in a power-saving mode, it will detect the person's motions and raise the temperature.

And Nest has other capabilities that conventional thermostats don't. The Nest smartphone app allows users to control temperatures over the internet. If you're going on vacation, you can turn down the temperature on the way to the airport. Then when you return, you can turn up the temperature on your trip home so that the house is nice and warm when you arrive.

Nest has gotten the most buzz, but they're far from the only companies selling smart thermostats. Another startup called Ecobee unveiled a Nest competitor last year. It offers the ability to position up to 32 motion and temperature sensors around the house, helping the thermostat to figure out whether the house is empty or not, and to monitor the temperature in rooms where people actually are.

The giant of the thermostat industry, Honeywell, responded to Nest last year with a smart thermostat of its own called Lyric. This one has many of the same features as Nest. It can also talk to your smartphone to figure out whether you're home or not. When you (and others in your family) leave home with your smartphone, Lyric turns down the heat. As you approach home, Lyric turns it back up.

Smart thermostats can pay for themselves in two to four years

The Ecobee 3 has a large touchscreen display that shows weather forecasts. (The Verge)

How much energy can these products save? This depends on a variety of factors, including how cold (or hot) it is where you live, how big of a temperature swing you're willing to tolerate, and the type of heating system you have.

Forced-air heating systems generally produce the most cost savings because they're easy to turn on and off at a moment's notice. Programmable thermostats don't work as well for other systems. The Department of Energy says that most programmable thermostats don't actually save energy for heat pumps. And heating systems with slow response times, like steam and radiant floor systems, require different algorithms to save energy while keeping temperatures comfortable.

So how much can you save using a smart thermostat? The most thorough study I was able to find comes from Nest itself, and should obviously be taken with a grain of salt. Nest found that users of its smart thermostat saved 10 to 12 percent of their heating costs and 15 percent of cooling costs.

This seems plausible. It's consistent with the Energy Department's own estimate that programmable thermostats in general can save 5 to 15 percent of heating costs. And one Nest user who wrote about the experience reported saving more than 20 percent.

The Nest, Ecobee, and Honeywell smart thermostats all cost $249. The average American home is projected to spend between $649 (for gas heating, the cheapest option) and $2,046 (for heating oil, the most expensive) this winter. So for most households a smart thermostat will pay for itself in two to four years. If you live somewhere cold, it could pay off even faster.