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How Does a Smart Thermostat Save Money on Utility Expenses?

December 07, 2020

Keeping your San Jose house comfortable can consume a big chunk of change. The usual household spends about $172 on monthly heating and cooling bills, according to ENERGY STAR®, or about $2,060 annually. At least half of that is for heating and cooling.

The majority of homes use programmable thermostats, but the majority of people don’t bother to use them properly. The process is bothersome, detailed and only gives you a few options for temperature settings. When your home remains at the same setting throughout the day, it consumes gas and electricity and badly affects your monthly expenses.

Smart thermostats learn from your day-to-day activities and adjust the temp to accompany it. But can using one really help you spend less money on heating and cooling? Yes, and here’s why.

Studies Show Smart Thermostats Reduce on Utility Bills

Independent studies show these devices can lead to big savings.

These studies included home utility costs in 41 states before and after installing a Nest smart thermostat. Nest said the study showed its thermostats can save up to 12% on heating and 15% on cooling, generating an estimated savings of $131 to $145 each year.

With the typical smart thermostat running between $100–$250, those savings can help it pay for itself. And most local energy companies offer rebates for smart thermostats because they’re ENERGY STAR® certified.

How Does a Smart Thermostat Work?

After your smart thermostat is installed, you’ll initially use it just like your previous thermostat. You’ll switch it up and down, so the thermostat can learn about your preferences. Then, it will begin creating a program that helps you spend less money, whether you’re at your residence or out and about. Because it geofences with your smartphone, you won’t have to put it on your list to adjust it when you go or come back.

Pros and Cons of Using a Smart Thermostat


As we talked about prior, smart thermostats offer lots of benefits to your house and utility expenses, including:

  • No need to adjust—Your smart thermostat will learn your schedule, so you don’t have to spend time adjusting programs or remember to change.
  • Knows when you get home and leave—Because lots of smart thermostats geofence with your phone, your house will go into an energy-efficient setting when you leave and be cozy when you arrive.
  • Remote temperature control—You’ll be able to keep an eye on your residence’s temperature from virtually anyplace, due to an app on your phone.
  • Monitor heating and cooling use—Most smart thermostats provide valuable data through their app, including how long you needed heating and cooling on a particular day.
  • Reminders—Select smart thermostats will alert you to crucial maintenance tasks, like when it’s time to replace your air filter.
  • Added savings—Most local energy companies offer rebates for smart thermostats, so call with yours for details.


Having said that, there’s a couple of things you should consider regarding adding a smart thermostat in your residence:

  • Compatibility—Based on the type and age of your heating and cooling system, a smart thermostat might not function with it. If you don’t know, it’s advisable to ask an HVAC pro like American HVAC Inc. We also suggest having it professionally installed. This guarantees that you have the right number of wires and that it’s linked right. Some systems don’t include a common wire, which creates compatibility troubles with a smart thermostat. This wire energizes your thermostat, so if your residence doesn’t have a C-wire, we can add one.
  • Housing situation—If you own your residence and are planning to reside there for a long time, it’s a smart investment to have a smart thermostat. If you plan to move in the next year or rent, we recommend delaying unless you plan to take the thermostat with you. If you rent, you’ll usually need to get your landlord’s permission first before getting a new thermostat.
  • Cost—Smart thermostats are pricier than programmable thermostats, and we advise having yours professionally installed. However, the energy savings over its lifetime can help pay for itself.
  • Lifestyle—Does a family member work from home, or is someone frequently at the house? If so, you might not see as many savings, but you’ll get the benefits of not needing to program or adjust a thermostat.

Depend on American HVAC Inc for Your Smart Thermostat Needs

At American HVAC Inc, our number one priority is to keep your residence pleasant while helping you save on utility expenses. If you’re considering installing a smart thermostat, our pros can help, from choosing the right model to expert installation. Give us a call at 408-215-1018 today to learn more.