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Buildings and Cities

Smart Thermostats

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Thermostats are mission control for residential energy use for heating and cooling—9 percent of energy consumption in the United States. At present, the majority of thermostats require manual operation or preset programming, and studies show people are notoriously unreliable in doing either efficiently. Smart thermostats eliminate the capriciousness of human behavior, thereby driving more predictable energy savings.

The first smart thermostat, the Nest, came to market in 2011, developed by a team of former iPhone engineers who saw an opportunity to bring smartphone thinking to the antiquated temperature controls in homes. Thanks to algorithms and sensors, next-generation thermostats learn over time by gathering and analyzing data. You can still turn the temperature up and down, but these devices will remember your choices and memorize your routines—adapting to the dynamic nature of day-to-day living.

Smart thermostats detect occupancy, learn inhabitants’ preferences, and nudge users toward more efficient behavior. The newest technologies also integrate demand response; they can reduce consumption at times of peak energy use, peak prices, and peak emissions. The net effect: Residences are more energy efficient, more comfortable, and less costly to operate.


European Union’s energy use [for heating and cooling]: European Commission. An EU Strategy on Heating and Cooling. Brussels, February 16, 2016.

Residential thermostats…U.S. energy consumption: Peffer, T., M. Pritoni, A. Meier, C. Aragon, and D. Perry. “How People Use Thermostats in Homes: A Review.” Building and Environment 46 (2011): 2529-2541.

manual operation or preset programming…unreliable: Peffer et al, “Thermostats.”

The Nest came to market in 2011: Lohr, Steve. “Ex-Apple Leaders Push the Humble Thermostat into the Digital Age.” New York Times. October 25, 2011.

white paper [on] energy savings: Nest Labs. Energy Savings from the Nest Learning Thermostat: Energy Bill Analysis Results. Palo Alto: Nest Labs, 2015.

payback in less than two years: Nest Labs, Energy Savings.

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p. 98

Correction: Originating in North America and migrating to Europe, smart thermostats occupy a fraction of the addressable market at present.

Correction: $74.2 BILLION NET COST
NOTE: This correction also applies on p. 223 and p. 224.

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