CLEVELAND — U.S. demand for smart and connected thermostats is forecast to increase 23 percent annually through 2022 to 14.5 million units — largely tracking value demand trends but at a significantly faster pace due to falling prices — with smart thermostats siphoning market share away from connected types, according to a study from The Freedonia Group.
Going forward, the most significant driver of unit sales of smart and connected thermostats will be the rapidly declining prices, which will support multiple-unit consumer adoption. Ramped up efforts by utility companies, homebuilders, and HVAC contractors to promote these products based on their cost- and energy-saving benefits will also underlie growth.
For example, utilities may offer rebates and other financial incentives to customers who install approved smart or connected thermostats and/or enroll in a DR program — which can greatly reduce if not neutralize the initial investment for these products. Furthermore, partnerships with smart thermostat manufacturers are increasingly common among HVAC contractors and homebuilders. Such partnerships drive adoption by capitalizing on the established relationships between these professionals and the customers they serve; educating clients about the potential cost- and energy-saving benefits; and installing the smart thermostat at the time of construction, increasing the likelihood that the home buyer will keep and maintain it.
The smart and connected thermostat market is expected to transition to become more replacement-oriented between 2022 and 2025, which will correspond with declining sales. By then, most households interested in these products will have purchased one.
The full report, "Smart & Connected Thermostats in the US," is available for purchase from The Freedonia Group.
Publication date: 8/10/2018