Market research firm Navigant Research released a new report predicting that 32 million smart thermostats will have been installed worldwide by 2020, a giant leap from the less than 1.4 million currently installed today. According to report the global smart thermostat market could be worth nearly $1.4 billion by 2020, up from about $100 million. With their convenience, advanced technology, and data collection ability, smart thermostats can change the way people interact with their houses and lead to energy- and cost-savings by allocating energy use and allowing for remote control.
They are also a boon for utility companies, which can monitor energy use, collect more data, and do things like shave energy consumption during a peak grid event while maintaining comfort levels. By combining behavioral data with utility data, weather data, personal use data, demographics data and more utilities can collectively manage the thermostats and deliver energy savings.
The report predicts that much of the growth will occur because utilities will sell more devices to their customers to avoid unnecessary expansion costs or meet energy efficiency goals or mandates.
Also known as programmable communicating thermostats (PCTs), smart thermostats utilize integrated technologies that surpass the basic sensing and control functions of traditional thermostats.
“Unlike products and solutions that are driven by government-sponsored utility smart grid programs, smart thermostats have remained largely in the commercial sphere, where individual energy efficiency awareness and cost savings determine purchasing decisions,” Bob Lockhart, research director with Navigant Research, said in a written statement. “However, the combined factors of increased energy awareness, interest in home automation and security tools, and more user-friendly solutions have led to an uptick in shipments for residential smart thermostats during the past year and have revived a sense of optimism and excitement among vendors and stakeholders.”
Greentech Media Research thinks that the report takes a conservative approach to some market barriers and that the growth figures could potentially be higher.
One smart thermostat that stands out is called the Nest Learning Thermostat, or simply Nest. Nest learns from a household’s energy use patterns and habits in an effort to bring home energy use in-line with modern digital technology communication capabilities.
“It was unacceptable to me that the device that controls 10 percent of all energy consumed in the U.S. hadn’t kept up with advancements in technology and design,” said Tony Fadell, co-founder and chief executive officer of Nest Labs, told WebProNews. “We hope it will not only save money and energy, but that it will teach and inspire people to think more about how they can reduce home energy consumption.”
According to GTM, Nest Labs is reportedly shipping 40,000 smart thermostats per month, with its highest installation rates coming on Christmas of last year. The thermostat currently retails for $249.
People are buying smart thermostats not just to save money or energy, but because they are convenient and can be controlled from a smartphone, according to Greentech Media.
Before co-founding Nest Labs Fadell led the team that created the first 18 generations of the iPod and the first three generations of the iPhone.
“Before, we had portable CD players and MP3 players, and people were like ‘what are you getting into that for, it’s tapped out, there’s no money to be made’,” Fadell recently told The Irish Times. “The same with the phone market”:
“If I look at every single market that we went into, and then crushed, there’s a lot in common when you go to look at something like the thermostat: huge existing market, fully commoditized, with a bunch of entrenched competition, people don’t think you can reinvent the category at all. You go again with smoke alarms. I don’t believe the warnings. I’m like ‘Are you kidding me, that’s a great market for innovation. People see problems, I see opportunities.”