Checking the cost: Do smart homes really save energy?

Does that smart thermostat actually help?

Do smart homes really save energy?
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Do smart homes save energy? Are all our cool, connected gadgets really going to rescue the planet, one iconic design at a time? It’s an often-touted benefit of ditching your old, plastic white gadgets in favour of shiny new black ones. But is it accurate? Yes and no.

The sustainable living movement and the smart home have come of age together over the last few decades, enjoying a beneficial but sometimes uneasy partnership. Yes, smart home devices can save resources. No, not all of them will. Some, such as always-on smart speakers and connected cameras actually use more, because they’re not replacing an energy load, they’re adding one (although not a significant one). Others, including smart thermostats and AI-powered water and energy monitoring systems, are forging a path to a brighter, greener future – and saving us some cash along the way.

Smart isn’t always green

Do smart homes really save energy?

“Not all smart home devices save energy but certain devices – like Ecobee Smart Thermostats – were designed to reduce energy consumption,” says Fatima Crerar, Director of Social Impact at Ecobee. The key word here is “designed”. While Ecobee and Nest, pioneers of the connected thermostat, claim their products can save up to 23% and 10-15% respectively, you’re probably not saving that much. Most research puts the figures somewhere between 1% and 15%, and in a few cases energy consumption can actually go up.

“We've seen everything from really high savings for heating and cooling, to increases in heating and cooling costs,” says Nick Lange, Technical Lead for Thermostat Practice at VEIC – a non-profit think tank that evaluates the environmental, economic, and societal benefits of clean and efficient energy use. “With this new generation of connected communicating thermostats, caveat emptor. Just because it can talk with the internet doesn't mean it's necessarily going to do a better job for you.”

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The problem isn’t the design, it’s the way we use them. A pilot program for Illinois-based power company ComEd tracked approximately 3,200 homeowners with a Nest installed for 12 months. The results found that average daily electricity use went down by 1.5%. But these types of studies need to be taken with several grains of salt, says Lange.

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“The short answer is that it depends a lot on a number of predictable factors,” says Lange. “Including, what you had before and how you used it, and which product you buy, and how you use it.”

If you had a non-programmable thermostat and you buy a smart one, your energy savings will be impressive. If you had a programmable thermostat you adjusted seasonally you may not see much change. If you buy a smart thermostat and don’t enable certain features, you’re probably wasting your money.

Actual data on how much energy a smart thermostat saves is hard to come by because of these factors. Energy Star recognised this and created an entirely new certification process to apply to smart thermostats, eschewing its traditional laboratory measurements and instead modelling the energy savings using aggregate data from homes. There are currently 37 “connected” thermostats with an Energy Star rating.

Connected devices can’t do all the work

Do smart homes really save energy?

Another major caveat is the home itself. All connected energy-saving devices face an uphill battle due to decades of inefficient building construction. Putting a smart thermostat in a home with single pane windows and no insulation to reduce energy consumption is a bit like putting a band aid over a fissure in the Hoover Dam and calling it fixed.

“I do think energy savings through smart devices is a harder value prop in retrofitting,” says Jennifer Dickson, CEO of net-zero home-building startup Acre Designs. “A Nest thermostat lets you program less comfortable temperatures while you're away, but it's not changing the duct work in any way.”

A home built from the ground up to be sustainable will always provide greater energy-efficiency, with a little help from connected tech. In Acre’s homes, individual room dampers are managed by a smart thermostat embedded in a smart light switch, which also contains sensors that can intelligently drop window shades to prevent solar heat gain and sense incoming weather fronts to get ahead of precooling or pre-heating.

In a DIY smart home, you can target some of the home’s biggest energy sucks: smart thermostats can cut a chunk out of the 48% energy use heating and cooling accounts for; electronics, lighting and other appliances, which consume 30%, can be mitigated with smart plugs, smart switches paired with LED bulbs, and better engineered appliances (such as the June Oven with its advanced carbon fibre heating elements and high-volume convection fans, which speed up the cooking process by 25%). But if a home wasn’t designed to save energy, you’re always playing catch up.

Adapt and change or…?

Do smart homes really save energy?

A more complete solution may lie in smart systems that tap into the infrastructure of the home. Flo is a product that can help save over 10% of a home's water use, just by identifying leaks, through monitoring the temperature, flow and pressure of water going through the system. “Thirteen percent of water that goes into our homes is lost due to leaks; that's millions of gallons a year,” says Gabriel Halimi, CEO of Flo. His product identifies leaks and learns a home’s water usage, allowing a homeowner to start changing behaviour to reduce use.

Sense is a device that connects to your electrical panel and learns the usage of your home, eventually identifying patterns to become more efficient. In 2018, Sense and Efficiency Vermont ran a pilot program to see how the technology could encourage people to use less energy.


The pilot found the potential for savings of $100 a year, or 8% of average household usage. “We learned that through more precise energy accounting we could enable systems that served more accurate insights and personalised feedback, creating a higher-quality, high-return relationship between people and their energy use,” Lange wrote in his report on the study for VEIC, which researches and assesses clean energy programs.

The onus, however, is still on us to make those changes. “I do think that these devices, given their intelligence and the trend tracking, help homeowners save energy,” says Sara Gutterman, CEO of trade publication Green Builder Media. “Just having the awareness of your energy usage and being able to monitor your devices, whether you're in the home or remotely, and see the trends of your own energy use, brings value and some level of energy savings.”

Connected today, smart in the future

Do smart homes really save energy?

While we may not yet be reaping all the benefits smart devices have the potential to unlock, today’s smart home technologies are crucial as a proof of concept. “It enables the expansion of these markets,” says Dickson. “If you can prove out adoption, then builders will begin to think they can integrate these things into homes, and it becomes more of an expectation for the consumer.”

And eventually perhaps, required. “In the not so distant future, some of these energy savings and monitoring devices are not going to be a choice for existing homes, they’ll start getting written into code,” says Gutterman. “In places like Austin, in order to resell an existing home, you actually have to meet a certain energy performance requirement. Part of that is through building envelope, but part of that is with energy-saving devices.”

Insurance and energy companies are seeing the benefits, offering discounts to customers for installing and using devices. Water companies are getting in on the action, offering rebates for Water Sense certified smart irrigation timers. By installing one of these devices, which can automatically adjust watering schedules for changing weather conditions, homeowners can save a lot of water. “Together, the Rachio community has already saved more than 33 billion gallons,” according to Julie Reeves, CMO of Rachio, the first consumer smart irrigation controller.

Today, we’re the guinea pigs, providing the groundwork for a future where connected technology could provide actionable solutions


Data from these devices provide value too. Ecobee recently created a program called Donate your Data – where customers opt-in to anonymously donate energy usage data. “We package it into large data sets that we then share with the research community,” says Crerar. A group in Indiana used this program to design a system to improve energy use. “This research found potential energy savings that would eliminate the state’s need for a new power plant, and could save taxpayers between $448 million and $2.3 billion,” says Crerar.

Today, we’re the guinea pigs, providing the groundwork for a future where connected technology could provide actionable solutions to solve our excessive energy consumption. “We're still in the nascent phases of what we are going to see with respect to the benefits of the smart home because we're still in the smart home 1.0,” says Gutterman. “The technology and devices are still evolving.” As we shift to the truly connected home, one with advanced sensors and systems that can talk with one another, the home will be able to do more autonomously to save energy.

“That’s smart home 2.0,” says Gutterman. That’s when the smart home becomes the sustainable home.

TAGGED    smart home    thermostats

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