The Best Smart Thermostats: Can They Save Money on Your Energy Bills?

Reading time: 4 minutes

4 minutes read

Category: Home Utilities
Posted on: 01/19/2019
a woman adjusting the smart thermostat on the wall of her home

In today’s world, it seems like every consumer product has to be “smart”. In addition to our smart phones, we have smart refrigerators telling us to pick up milk, smart toothbrushes telling us how to brush our teeth and other products no one seemed to ask for or need. Despite this trend, a core group of smart products have proven themselves to not only make our lives genuinely easier and better but the ability to save us money and pay for themselves. One of the best examples is the smart thermostat.

Smart thermostats bring genuine improvements to its predecessor and make sense for households everywhere to investigate. However, what exactly are smart thermostats, how do they enable energy savings and how do you know the best ones to choose? Let’s find out!

What’s Thermostat Smart?

Thermostats, old and new, all serve the same purpose: control a building’s heating and cooling systems to keep interior spaces at the designated temperature. These products had already gone through evolution over the years, from being manually adjusted room-by-room to being able to control multiple rooms and operate on a timer. However, the latest evolution into smart thermostats is the most exciting and offers the greatest opportunity.

By definition, smart thermostats are ones that can be used in an automated and/or remote manner, such as through a mobile app or a web portal, that allow for controlling of the heating settings through other Internet-connected devices. Smart thermostats can be set up to be controlled by voice-controlled assistants, like Amazon Alexa, or they can be integrated into greater home energy management systems, like Apple Homekit.

The more interconnected the smart thermostat is with your total home energy system, the more opportunities there are to perform unique and interesting functions and make your home really feel like one out of a science fiction movie.

How Can Smart Thermostats Be Used to Save Energy?

In the most basic function, smart thermostats help to reduce home energy consumption by allowing homeowners to adjust the temperature of their home remotely and/or in a preprogrammed pattern throughout the day. The ability of smart thermostats to use computing power to ‘learn’ a home’s pattern of energy use, occupancy and heating/cooling needs enables the type of use that would be impossible with a regular thermostat.

By minimizing the time that energy is wasted by being poured into a building’s heating and cool needs, the single largest consumer of energy in typical homes, the more efficient that home’s energy-use profile will be.

To put a number of these savings, one study finds that smart thermostats typically save their customers about 10-12% on heating costs and 15% on cooling costs for an annual average savings of $131 to $145. Of course, not only do such practices help the planet by reducing energy use and associated greenhouse gas emissions, but as a customer that reduction in energy use will save you real money on your monthly power bills - which will amass to more than enough savings to payback the cost of a smart thermostat in the first place in under two years!

What are the Best Smart Thermostats?

As one of the most popular smart home products available on the market, there’s no shortage of options to choose from when deciding to purchase a smart thermostat for your home. Deciding the best one for you depends on your unique needs, but the most popular smart thermostats available today come from Nest, Honeywell and Ecobee.


Nest is typically the first name thought of when smart thermostats are brought up, and that association is with good reason. The series of Nest thermostats, including the latest Nest Learning Thermostat (3rd generation), were developed by Google and do more than any others at ensuring compatibility with approved third-party devices and other types of Nest products.

Unfortunately, that means there are some non-approved competitors in the smart home market that Nest doesn’t play well with, such as Apple products, but if you’re building your smart home from the ground up and want to invest in other Nest products (like security cameras or smoke detectors) then Nest is a great all-in-one direction in which to go.


Where Nest might be a top of the line product, Honeywell offers great products that strip smart thermostat down to the basics and come at a lower upfront cost, enabling more customers access to get their feet wet in the smart home game. For example, Honeywell’s Lyric T5 smart thermostat comes at about half the price as the Nest Learning Thermostat.

While that means you’ll lose the integration with many other products and certain artificial intelligence and computer learning abilities, customers who just want the basic function of smart thermostats to help them manage their energy use will certainly get their money’s worth from the Honeywell products.


The Ecobee4 Alexa-Enabled Thermostat is unique in that it integrates the Amazon Alexa voice-control assistant right into it. This inclusion means you don’t need to purchase or already own an Amazon Alexa device to be able to control your smart thermostat through voice alone. After purchasing and installing the Ecobee4 Alexa-Enabled Thermostat, you’ll be immediately able to announce “Turn the heat off” or “Turn the air conditioning on at 8 PM” from anywhere within earshot and have the smart thermostat do the work for you. This ability also means your smart thermostat can quickly integrate with other smart home devices (such as smart lights) and you can control them all through this one voice assistant.

Another advantage the Ecobee4 thermostat has over some of its competitors is the ability to place sensors in multiple rooms. Thermostats that only have one sensor will control the entire home’s temperature based on how it feels in one location, whereas the multiple sensors of the Ecobee4 thermostat enable custom temperature readings and settings in different rooms of the house.

Finance Guru

Finance Guru