Internet-connected thermostats, which offer users greater flexibility in controlling their HVAC systems as well as opportunities to run those systems more efficiently, are gaining wider acceptance in the marketplace.

About 30% of residential thermostats in the U.S. and Canada are connected thermostats, or CTs, and connected models make up about half of all thermostat sales, according to the U.S. Department of Energy (DOE).

CTs are connected to the internet, typically through a building’s Wi-Fi system, and allow users to see, set, and adjust heating and cooling temperatures remotely, via a laptop or a smartphone; some can monitor occupancy, humidity, and temperatures at multiple points in a building. More advanced models — smart thermostats — have artificial intelligence features that can take into account occupancy patterns, outdoor temperature, humidity, and a building’s insulation, and use that information to set HVAC system run schedules for optimum energy savings, the DOE says. Some smart thermostats can even chart energy use.

The CT market, and the smart thermostat market in particular, represent some untapped opportunities for contractors as well as for manufacturers and distributors.

Market Research

Parks Associates, a Dallas-area firm that studies the markets for high-tech products designed for consumers and small- and medium-sized businesses, found in research released in June that 29 % of U.S. households with an internet connection report plans to buy a smart thermostat by the end of the year.

Smart thermostat adoption reached 13% of the U.S. market in 2017 among households with an internet connection, according to research by Parks, and although that share has remained flat for several years, senior analyst Chris White said those who own them are largely happy with them and with the resulting energy savings. In April, Parks announced another study that found the users of smart thermostats reported average savings of $49 a month.

Nest (a Google brand), Honeywell/Resideo, and ecobee, which introduced the smart thermostat to the market in 2007, have the biggest shares in the thermostat market, according to Parks research.

Parks also looks at many of the demographic characteristics linked to the use of smart thermostats.

"Like most connected devices, we see higher education and income, a stronger affinity for technology, and having children in the home all make consumers more likely to (use) or intend to buy a smart thermostat," White said. People who own second homes are more likely to see the benefits of smart thermostats, he added, and people in rural areas are more likely to be reluctant about adopting them.

Although climate types vary across the U.S., the rates of smart thermostat adoption are similar across different regions of the country, White said.

"Smart thermostat ownership is driven more by the consumer than the consumer’s environment," he said. In the western U.S., however, the greater popularity of smart thermostats in Texas and California pushes up the overall adoption rate for the entire region.

Emerson: Smart Market Growing

At St. Louis-based Emerson, which offers several thermostat brands, including the Sensi brand of smart thermostats, introduced in 2014, sales of smart thermostats outpace those of its more traditional types, said Brendan O’Toole, vice president of Emerson’s Sensi product platform.

"We continue to sell a significant amount of traditional non-connected thermostats, and that continues to grow, but our smart thermostat base is growing even quicker," O’Toole said.

Emerson’s thermostat offerings include traditional, non-connected White-Rodgers models, and the Verdant-branded smart thermostats; the latter brand, acquired by Emerson in 2020, is typically used in hotels, dormitories, assisted-living centers and similar residential facilities.

"Based on the demand we are seeing, we expect to see continued robust growth," he said. "We are also seeing a shift from the DIY (do-it-yourself) to contractor install as we move into more of a mainstream audience that might be less comfortable installing themselves."

Emerson conducts annual surveys of Sensi users. Among the results of the 2021 survey:

• About 34% of Sensi owners purchased their thermostats online, 29% obtained them through local utility companies (up from 12% in the 2019 survey), 12% got them as part of new HVAC systems, 6% from HVAC professionals, and 14% from brick-and-mortar stores. (The rest either answered "other" or had a Sensi thermostat when they moved into their home.)
• About 83% of Sensi owners had replaced non-Wi-Fi, non-smart thermostats that were still working, 8% had replaced broken non-Wi-Fi thermostats, 6% had replaced working Wi-Fi thermostats, and 2% had replaced non-working Wi-Fi thermostats. (The remainder answered "other.")

‘A Nice Upsell’

"A smart thermostat offers a nice upsell," said O’Toole.

At the same time, he said, consumers are focused on ease of use and the potential energy savings. However, many have concerns around their data privacy. "Our advice for contractors looking at a brand to stock on their truck would be to choose a brand that you know and trust," he said.

A 2021 report from the Smart Energy Consumer Collaborative, based on an online survey of 1,520 people in the U.S. and 500 in Canada, found that among those who hadn’t adopted smart home technology, 57% didn’t see the need for it and 45% had concerns about data security.

"There are options out there that do not leverage a customer’s thermostat data," and Sensi is one of those, O’Toole said.

The DOE’s Lawrence Berkeley National Laboratory, managed by the University of California, recently published a study about the performance of connected thermostats.