Boosting your home’s IQ delivers savings and improves comfort

US homes can lower their energy use by up to one-sixth simply by incorporating smart technologies, according to our new report, Energy Impacts of Smart Home Technologies. In addition, these technologies — a combination of software, sensors, and hardware that monitor and control a home’s interior environment — allow homes to shift some of their energy use to times when energy demand and pricing are lowest. This pairing of energy savings and peak demand reduction is a win-win scenario for consumers and utilities alike.

In our report, we discuss several smart home technologies that serve the major home energy uses: HVAC, lighting, appliances, and plug loads. These smart systems use energy only where and when it is needed, making our homes smart and efficient.

Smart technologies deliver cost savings, energy savings, and comfort

An efficient smart home takes advantage of the interactions of technologies, which can work together to optimize their operation and share their status and data with one another. For example, a smart thermostat can signal smart window shades to let in more sunlight in the winter. The lighting then dims or turns off in response to the increase in daylight, while any solar heat gained through the windows may supplement the home’s heating needs. In short, smart technologies that target major end uses can change the picture of household energy consumption.

Of the technologies we explore in this report, smart thermostats are most prevalent —  11% of US households have one. Smart thermostats respond to occupancy, local weather conditions, and other inputs and use programming algorithms to seamlessly heat and cool the home. Smart thermostats can reduce the HVAC energy consumption of a typical household by 6–10% on average. Similar to smart thermostats, smart water heating controls can learn household patterns around hot water use.

Home energy management systems (HEMS) make it possible to control multiple systems in the home simultaneously. They can analyze the energy performance of these systems and provide feedback to residents through user-friendly interfaces, yielding energy savings of 5–22%; actual savings depend on which end uses are controlled.

Generating energy savings from smart technologies is not always straightforward, because each home is as unique as its residents. Consumer behavior plays a role in energy consumption, and energy savings depends on how each of us interacts with the smart devices in our homes.

The potential for retrofits

Smart home technologies can be particularly effective in retrofit programs. A smart home retrofit holds the promise for improved energy management when compared to a typical home that relies on manual inputs and often goes unmanaged. Many smart technologies are battery-powered and wireless, making them retrofit friendly. They can generate their own energy consumption data and provide real-time feedback on project performance. Contractors and service providers can then leverage these data to identify additional energy efficiency opportunities and educate residents about their energy use and influence their behavior.

Technology adoption is influenced by incentives…

Smart technologies may communicate with distributed energy resources and the power grid for demand-side management. Utilities are incentivizing these technologies through their energy efficiency and demand response programs, often by providing rebates and energy bill credits for participation in demand response events. Some utilities deploy time-of-use rate structures to provide incentives to customers who voluntarily curb their energy use during peak demand periods. Utilities and third-party service providers administer demand response programs and often create customized energy efficiency solutions for customers.

…and also by barriers

However not all consumers are rushing to install smart technology in their homes. Upfront purchase costs and the perceived complexity of smart technology are the leading barriers to investment. Some consumers are hesitant to install smart home technologies because of looming cybersecurity concerns. For some populations — those without internet access — the smart home is not yet a viable option.

Making smart technology more accessible

To realize the full potential of smart technologies, consumer acceptance must evolve beyond early adopters and reach the broader population. Some Americans have been quick to equip their homes with smart devices that enhance safety and privacy, and many appreciate the convenience of controlling their homes through voice commands and customized schedules. However there are few comprehensive studies documenting the performance of smart technologies in US homes. Increased efforts to more fully analyze and translate smart technology data into meaningful, actionable findings could prove useful to home performance and energy efficiency programs, leading to a smarter energy future for utilities, policymakers, and, ultimately, all of us.