Increased Interest in Energy Efficiency Results in Demand for Smart Thermostats

By Thomas Price Monday, November 2, 2020

Technology has continued to advance in new and different directions that may not have been necessarily apparent to the consumer over the years. Of the many innovations made, the advent of smart thermostats has caught on in a way that may have initially left people puzzled. However, the further interest in convenience, energy efficiency, and precision have created a large and growing market for them, where there once was not. In fact, as quickly as the smart thermostat market has grown since its inception, recent reports on the industry suggest that its peak is still yet to come.

The Smart Thermostat Market as It Stands

The smart thermostat market has done incredibly well over the course of the past few years. While 2020 has hit all markets of business, a better indication of the future in the smart thermostat market would be 2019. In that year, global smart thermostat revenues reached an impressive $2.03 billion. North America and Europe remain the largest points of sale for smart thermostats. However, sales in the Asia-Pacific region along with the Middle East look to be major growth centers in the near future along with Australia and South America. The top five brands for the smart thermostat market are Nest Labs Inc., Ecobee, Emerson Electric Co., Johnson Controls, and Honeywell International. A major reason for these impressive numbers comes from the claims of various smart thermostat companies that their use could be a major difference in increasing energy efficiency.

Ecobee has said that use of their thermostat could result in 23% off of energy bills. Google’s Nest has made similar statements saying that its use could save up to 10-12% on heating and 15% on cooling. Especially considering the growth in demand in energy over the coming years, savings like these could become a much bigger deal. In fact, global energy demands are going to grow by 2.1% every single year. By 2040, that will translate to a 24% increase in energy demand from where it currently stands. So, any savings at all coming from smart thermostats becomes more significant for the average consumer.

The Smart Thermostat Market in the Coming Years

The smart thermostat market is set for a major period of growth in the near future, with more and more homes being equipped with high-speed internet and digital assistants such as the Amazon Echo as well as Google’s Nest. The current estimates over the next five years see the smart thermostat market set to expand at a compound annual growth rate of an astounding 23.1%. This growth is significant enough that by the year 2025, the global annual revenues for smart thermostats is estimated to reach $4.81 billion. This trend is in line with the need for greater energy efficiency, as well as the growth of in-home digital assistants which connect in many ways to smart thermostats.

Machine-to-machine (M2M) devices are expected to grow as well over this period of time, which almost always connect to available smart thermostats. In 2018, there were 6.1 billion M2M connected devices globally. Currently, there are 8.9 billion M2M connected devices, almost a third more. Estimates have the future of connected devices even higher in the near future. By the year 2023, there is going to be a projected 14.7 billion M2M connected devices in use globally. With the positive trends for both this as well as smart thermostats, the market is set for a major step forward in the next few years.

Final Conclusions

The world is going to need more energy in the future. A major source of energy consumption for personal consumers right now remains still in temperature control. Smart thermostats have been a realistic way to create higher energy efficiency in regard to heating and cooling for individuals. That, along with the higher rates of personal devices that create connected homes, this growth is compounded. The smart thermostat market is deeply interconnected with the overall rise of M2M connected devices. Given that both are projected to see major gains in the coming years as modern homes become more integrated with these systems, the market should see continued expansion as the technology continues to develop.

About the Author

Headshot of Thomas Price

Tom Price is a writer focusing on Entertainment and Sports Features. He has a degree from NYU in English with a minor in Creative Writing. He has been previously published for Washington Square News, Dignitas, CBR, and Numbers on the Boards.

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