For years, the humble thermostat has existed as a “set it and forget it” device. Add an app and an internet connection, though, and “Hey Alexa, it’s hot in here” suddenly becomes a reality.

Connected thermostats entered the market around 10 years ago, coinciding with the rise of in-home Wi-Fi, smartphones with apps to control Wi-Fi enabled technology, and — within the past two years — voice-controlled AI like Google Home, Apple HomePod, and Amazon Alexa and Echo. Per a 2017 report by Juniper Research, an estimated 55 percent of U.S. households will have at least one smart speaker by 2022, for a total of 175 million.

“If you look at the millions of these devices that have been sold, it’s become a real gateway for smart homes, in the research that we’ve seen,” said Rob Munin, CEO and president, Lux Products. “It’s really becoming more accepted.”

A MODERN MARKET

For people moving toward a smart-home system, the thermostat can be a logical first step.

“Every home has one,” said AJ Smith, vice president and general manager, Homes Pro Install Comfort, Honeywell Home and Building Technologies. “It’s not necessarily a choice, like cameras, and not as incrementally expensive as lighting. And it’s one of those things that’s typically a fundamental control point: I’m either hot or cold, and I want to be able to control that.”

Who’s buying? Smith sees a lot of interest from 30- and 40-year-olds: people who are beyond their first home and getting into their second.

“I think you’ve got a lot of people in their late 20s who are right on top of using technology ... but probably haven’t learned of all the things in a home that can be optimized,” he said. “You get a little more seasoned in your home and you know that OK, these can do a lot better.”

Seniors are another large market, he added — and one that’s often overlooked.

“As they age, some people get even more sensitive to comfort,” he said. “They certainly have disposable income; they’re experienced homeowners, they value having those optimum comfort systems, and they definitely won’t be pennywise, pound foolish on something that’s going to make them happier in their homes.”

Craig Johnson, president of Emerson’s Residential Solutions, estimates the percentage of homes that have Wi-Fi thermostats installed is around 7 percent.

“That’s up from 4 percent a year ago,” Johnson said. “What is encouraging is that our data suggests 30 to 35 percent are familiar with Wi-Fi thermostats, and 27 percent of U.S. households claim to be interested in purchasing a Wi-Fi thermostat in the future. That’s a great opportunity for contactors to make sure homeowners know they can provide that service.”

CONNECTED COMFORT

Driving the market for smart thermostats is a desire from homeowners to be in constant control of their home: what’s heated, what’s cooled, and when.

“I talk to my team a lot about giving control of the home back to the homeowner — using that connectivity to help people get better targeted comfort,” said Smith.

With a Wi-Fi thermostat, homeowners can operate their thermostats from the tablet on their nightstand or their smartphone across the country. They can tell Alexa to turn  up or down the air. Or, if they have geofencing enabled on their thermostat, they can skip Alexa altogether.

And that’s the second feature drawing people to smart thermostats, Smith said: convenience.

Geofencing works via in-home sensors that connect to the occupants’ smartphones, using the assumption that a person usually has their phone with them. When occupants leave home, the thermostat switches to an energy-efficient mode. When they return, it reverts to comfort mode. It helps target heating and cooling in different rooms of the house, too.

“So if [the connected smartphone] is up in the office on the second floor, that’s probably where you are, and you can optimize instead of generally heating and cooling an entire home,” said Smith.

Geofencing automates the programming process for homeowners, so they don’t have to think about it, especially if their schedule is erratic, said Johnson.

Earlier this year, Honeywell extended geofencing to spaces with mini-split systems — like sunrooms, porches, and additions — via the D6 Pro Wi-Fi Ductless Controller. Designed for mini splits, it connects with the main home system, giving the homeowner one-stop control. It also switches automatically from heating to cooling.

“We’ve taken the slick, this-takes-care-of-everything-for-you thermostat, so you don’t have to worry about a remote that really does look like a 1980s remote controller, and the contractor doesn’t have to learn a bunch of different remotes either,” Smith said.

In addition to being convenient, features like geofencing help make a home more energy efficient. In some cases, smart thermostats can save 30, 40, or 50 percent on energy bills, Smith reported, although results vary by region, climate, home setup, equipment maintenance, and number of residents in the home. In addition, the alert system can save money by allowing a homeowner to address issues before they become costly.

“To be able to control what’s going on at your cabin up in northern Michigan in the winter, before you have frozen pipes that burst and cause a lot of problems — that’s very valuable,” he said.

Key to getting the most value from a smart thermostat is making sure it can “talk” to other smart-home components. In addition to providing a seamless experience for the user, it makes the whole system more efficient.

“It can be very powerful to get a real ecosystem working together in your home,” Smith said. "For example, if the thermostat senses that a west-facing room is getting too hot in the afternoon, it can roll down the room’s smart blinds to keep out the rays, rather than automatically kick on the air."

While smart-home technology itself can be complex, the user interface, both on the wall and in the app, needs to remain simple to be accepted. Munin pointed to the Kona by Lux, its third-generation Wi-Fi product.

“It’s very simple," he said. "If it is cold, you turn it to the right — if it’s hot, you turn it to the left,” he said.

LOOKING AHEAD

Getting HVAC contractors comfortable with installing smart thermostats remains one of the challenges in taking the technology mainstream, according to manufacturers. As an incentive, manufacturers like Lux have started a co-branding program that allows the installer to display their contact information within the app.

If the homeowner has a question, it’s a one-touch connect to the contractor who did the installation. Lux also allows contractors who sign up to offer their customers an additional two-year warranty on top of the standard five-year Pro warranty.

“We’re doing that because we want them to know we stand behind our product and want them to be comfortable selling a product like the Kono Smart,” he said.

Other challenges remain outside a manufacturer or contractor’s control. Inadequate Wi-Fi coverage and bandwidth can pose a barrier, especially if internet providers use cheap modems or routers that aren’t set up to handle multiple smart devices.

Honeywell smart thermostats have been installed in 150 million homes, and Smith expects that number to grow at a consistent rate over the next five to seven years. According to Berg Insights, the number of homes with smart thermostats in North America and Europe is estimated to grow at a compound annual growth rate of 54.5 percent from 2015-2020, with North America forecasted to have 32.2 million homes with smart thermostats at the end of the period.

“I think it has hit that point where it’s going to grow, grow, grow,” Smith said. “After that, it’s all about innovation … can we continue to bring even more value in future thermostats, such that somebody says ‘Nothing’s broken with my old thermostat, but I like the functionality, look, and feel of that newest one, so I’m going to change it out anyway,’ the way we do with cell phones.”

Driving that message home starts with helping people realize the disconnect in using 1980s technology to control 21st-century equipment, Munin said.

“It’s about understanding the full ability that smart thermostats can afford … how we as an industry give the story that this is more than just a gimmick, more than just a gadget: this is something that makes sense.”

Publication date: 6/11/2018

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