Do programmable thermostats save money? We installed the Nest Thermostat last September (in 2016). Since we only had six and a half months of regular usage (after moving into our current home and before we installed the Nest), let’s take a look at the results from the 7 month period where we can get a close side-by-side comparison.
What uses the most energy in your home?
Before we jump into the results, it is worth mentioning that heating and cooling are – by far – the biggest consumers of your home’s energy. Your thermostat’s settings are responsible for almost HALF of your home’s total energy usage (and electric bill), while water heating accounts for about 14-18%. So, that being said, taking steps toward having a more energy efficient heating and cooling system is an area where you can have the greatest impact.
How much money will a programmable thermostat save?
I’ve owned a traditional programmable thermostat in the past and it was super easy to install. Just be sure to flip the breaker (OFF) on your heating and cooling system and follow the instructions that come with your replacement thermostat.
Programmable Thermostats: Can offer up to 10% savings if you simply adjust your temperature by 7°-10° for 8 hours a day.
With my first unit, I didn’t track my results like we did here. But, I know it saved me money just because I scheduled it to automatically adjust my temperature up or down during working and sleeping hours. You can change the times you run your heat or air conditioning according to pre-set schedules defined by you. Don’t worry… these schedules can be manually overridden without affecting your settings if needed.
Nest Learning Thermostat: 10% – 15% savings – The Nest is a programmable thermostat, but it’s actually much more than that. It is a smarter device, that learns your behavior and offers many more features than a basic programmable thermostat has.
According to Nest, independent studies have shown that the Nest Thermostat has saved people an average of 10% to 12% on heating bills and 15% on cooling bills. Based on typical energy costs, they’ve estimated average savings to be in the range of $131 to $145 a year. In other words, it will pay for itself sometime during the 1st or 2nd year on average. Our Nest paid for itself in just over 3 months because we bought it for around $50 (we bundled with another home device).
Because we’re part of the Black Sheep crew, we had much better than Nest’s reported average results. We installed our Nest thermostat about halfway through September of 2016, and saved just about $200 in less than 7 months.
That might not sound like a large sum of money, but when you think long-term rather than short term (As I discuss here: The Habitual Millionaire), more money in your pocket = more money in your Retirement/FIRE Accounts. If the average savings of $28.50/mo holds up, that’s $342 extra that you have to invest each year – you can feel good about that, because you are also saving the planet while fattening your own pockets. Those savings invested monthly, over 30 yrs, compounded annually at 6% puts an extra $27K in your accounts. Not too shabby!
|Month||Without Nest (2016)||With Nest (2017)|
|7 Month Totals||$1,165.84||$966.33|
Even if we had paid full price for it, we would have almost recouped the cost by the 7th or 8th month. I also expect that we will save even more in the next year, now that we are more familiar with the device, and now that Nest is more familiar with us (it has learned more about us) too. Your savings could be more or less than ours, obviously. It all depends on your own motivation and comfort levels. But, since you’re a part of the Black Sheep Family too, or are at least well on your way, I would expect your results to be very similar to ours 😉
Here are some key things to keep in mind about the details of our own results:
- Our house is 2,555 sq. ft. heated and cooled – larger houses obviously cost more to heat and cool, while smaller houses
willshould cost less
- We have a very large family with 6 people = lots of dishes + lots of laundry + lots of energy used for cooking + lots of showers (hot water)
- I work from home and Mrs. BSM is a stay-at-home, full-time Mom – we are in our house more than most people are in theirs, and we use energy more regularly throughout the day
- We have a pool (money pit) whose pump (money siphon) is used during summer months – Quality of Life Budget item for the kids and Mrs. 😉
- We try to maintain an average temperature setting of 78° in summer (The Mr.’s sacrifice)
- We try to maintain an average temperature setting of 68° in winter (The Mrs.’s sacrifice)
- Our savings were more significant in the peak seasons (Summer) vs. mild seasons (Spring)
- We use mostly CFL light bulbs
As you can see, our energy consumption should be on the higher side than most families’ since we are home all day and have such a large family. If the numbers from our electric bill (above) are drastically lower than yours are, I would definitely suggest that you begin looking at some ways to reduce your home’s energy consumption.
Which programmable thermostat is best?
In my opinion, the Nest is the best option. But, at the end of the day, the best option is the one you will actually purchase and use as it is intended to be used. If cost is a big factor for you, choose one of these lower cost options. If programming a more basic version seems cumbersome and you are less likely to do it; or if features and accessibility are more important to you, then go with the Nest.
Again, with any replacement thermostat you choose, your results will vary from someone else’s because there are many factors to consider. Here are a few differentiators if you want to know why we chose the Nest over other options:
- The Nest Thermostat earned an ENERGY STAR® from the EPA in February, 2017 – this is significant because in 2009, the EPA stripped all programmable thermostats of their ENERGY STAR®. They (the EPA) did this because they had been unable to confirm any improvement in terms of the savings delivered by programmable thermostats. Since then, Nest was the FIRST thermostat in America to have earned an ENERGY STAR®
- You can control your thermostat from anywhere with the Nest App
- It knows when you’re “Away” and adjusts itself accordingly (I don’t know if it also knows if you’ve been bad or good, or if it may have been designed by elves)
- Nest ‘learns’ which temperature settings you prefer during different times of the day and will set itself to accommodate your own personal preferences and schedule
- The unit displays a Nest Leaf to let you know when your thermostat is set to an economical temperature and when you are realizing significant energy savings
- It provides history and usage reports through the website and app
- It is compatible with Google Home, Alexa and IFTTT
There are two different models of the Nest offered now, as they recently introduced the Nest “E” at a significantly lower price than the original. Had the Nest E been out when we purchased ours, we would have opted for this model at a cheaper price. The only real difference between the two is that the Nest E does not have a high resolution color display or offer the farsight feature – that displays the time temperature or weather. Those two things aren’t really worth the additional $80 to me, personally.
Here is a breakdown of the features and options offered with the two different Nest models:
To see if your heating and cooling system is compatible with Nest, visit this page and follow the steps. If you decide you want to go that route, you can purchase yours from the Nest site, at most big box stores, or buy it on Amazon using the links provided in this post. If you opt to go for a more basic version than the Nest, you can find several low cost options here. Using the Amazon affiliate links won’t cost you any extra, but I might earn a few pennies for sharing these financial tips with you… and myself and the BSM family appreciate that very much ;-)*
*Some of the links and recommendations you see include affiliate links. These do not cost you any extra, but I might make a little commission: Click Here for Details