The Smart Thermostat Market in the United States was valued at USD 16.7 million in the year 2019 and is estimated to reach USD 19.71 million by the year 2020.
Its market value will reach USD 45.10 million by the end of the year 2025.
- Definition / Scope
- Market Overview
- Market Risks
- Top Market Opportunities
- Market Trends
- Industry Challenges
- Technology Trends
- Pricing Trends
- Regulatory Trends
- Market Size and Forecast
- Market Outlook
- Technology Roadmap
- Distribution Chain Analysis
- Competitive Factors
- Key Market Players
- Strategic Conclusion
- References
- Appendix
Definition / Scope
Smart thermostats are the electronic devices that have the self-learning capacity to automatically control ambience temperature and air conditioning as per the past data captured.
Here, the sensors are integrated with the smart-net technology that identifies user behavior, analyzes it, and adjusting the HVAC systems automatically and provides remote access to the internet-connected devices. It is based on either geofencing or algorithm technology.
The geofencing technology allows the detection of the owner’s location based on the global positioning system and radio frequency identification signals and the smart thermostat uses the location of the smart device to adjust the room temperature.
The algorithm software allows the smart thermostat to perform a variety of functions such as learning owners’ behavior and adjust the desired temperature automatically based on the behavior, season, and lifestyle.
It is compatible with a wide range of smart electronic appliances in the sector of residential, industrial buildings, educational institutions, hospitality, and healthcare.
Based on the type of the distribution channel, the smart thermostat market in the United States consists of a utility channel, retail channel, security channel, and HVAC channel.
Market Overview
The total market size of the global smart thermostat market is valued at USD 1.36 billion in the year 2019. The market value of the global smart thermostat market is expected to grow at a CAGR of 26% within the forecasted time horizon of 2020-2025 and its market size is expected to reach USD 8.78 billion by the year 2026.
The North American smart thermostat market is dominating the market with a market share of almost 70% of the total global smart thermostat market and the market value of this region is valued at USD 0.95 billion in the year 2019.
The market value of the North America Smart thermostat market is expected to grow at a CAGR of 20.1% within the forecasted time horizon of 2020-2025 to reach USD 5.5 billion by the end of the year 2030.
The total market size of the smart thermostat market in the United States is valued at USD 16.7 million in the year 2019, increased from USD 12 million in the year 2017.
Its market value is estimated to reach USD 19.71 million by the end of the year 2020. Its market value is expected to grow at a CAGR of almost 18% within the forecasted time horizon of 2020-2025.
Its market value will reach USD 45.10 million by the end of the year 2025. almost 37% of the residences have host programmable devices for central heating and 29% of the programmable devices for central cooling. In the context of the United States, almost 21% of households have a smart thermostat.
Based on the type of distribution channel, the retail channel segment is leading the market with a market share of almost 38.61% of the total thermostat market in the United States.
The market size of this segment is valued at USD 6.45 million in the year 2019. Growing adoption of smart home devices and its rising market, stringent government initiative for energy conservations, energy savings and reduction in energy bill costs, high level of awareness about the smart thermostat are the factors responsible for the growth and development of the smart thermostat market in the United States.
However, the limited interest of the consumer towards remote energy management, Issues of hacking and privacy concerns, and high installation cost of smart thermostat might restrain the growth and development of the smart thermostat market in the United States.
The key market players engaged in this smart thermostat market are Alarm.com, Carrier corporation, LUX products, Venstar, Emerson Electric, Nest Labs, Honeywell International, Control Corporation, Bosch Thermo technology, etc.
Market Risks
- High installation cost of smart thermostat
Although the use of a smart thermostat reduces the cost of the electricity bills by saving the electrical energy, the cost of installation of the smart thermostat is quite high. The cost of the installation and the devices of the smart thermostat is almost four times higher than that of the cost of the manual thermostats.
The cost of the smart thermostat ranges from USD 138.9 to USD 555.6 and depends on the type of smart thermostat. The high installation cost of the smart thermostat might restrain the growth and development of the smart thermostat market.
Top Market Opportunities
- Growing adoption of smart home devices and its rising market
In the context of the United States, the adoption of smart home devices is in increasing trend. A report from Strategy Analytics has stated that more than 54% of the households own at least one smart home device.
The smart home adoption in the United States is quite higher in comparison to the UK (50%), Germany (40%), and France (38%).
A survey conducted by the Smart Energy IP online among 5,000 people across the United States has shown that almost 32.8% of them were most interested in the smart thermostat among all the smart home products and solutions.
Along with this, the market for the smart home in the United States is also expected to grow at a CAGR of 16.9% within the forecasted time horizon of 2020-2025. Its market size is valued at USD 27.46 billion in the year 2019 and is expected to reach USD 62.68 billion by the end of 2023.
The growing adoption of smart home devices and the rising market value of the United States smart home market will create a favorable environment for the growth and development of the smart thermostat market in the United States.
- Stringent government initiative for energy conservations
The United States is ranked in the second position in terms of the consumption of energy globally. The government of the United States has developed different policies, strategies, incentives, and initiative programs.
Some of them are Energy Policy & Conservation Act, Energy Policy Act 2005, Energy Conservation Program for Consumer Products other than Automobiles, Energy Improvement and Extension Act 2008, National Action Plan for Energy Efficiency, etc.
Along with this, it has been mandated that 15% of existing federal buildings comply with the new efficiency standards by the year 2015 and 100% of all new federal buildings should be zero-net-energy by the year 2030.
The stringent governmental policies for the conservation of energy will create a significant opportunity for the growth and development of the smart thermostat market in the United States.
Market Trends
The factors driving the growth and development of the smart thermostat market in the United are increasing governmental initiatives for energy saving, rising demand of the energy-efficient devices, increasing penetration of IoT and artificial intelligence-based technologies, rapid adoption of smart infrastructure, reduction in electricity bill costs due to the energy savings, and raising awareness of the consumer about the smart thermostat. The major driving factor of the smart thermostat market are discussed as follows:
- Energy savings and reduction in energy bill costs
In the context of the United States, the average energy consumption of the household is about 103 MMBtu per year. Half of the energy bills are accounted for by the heating devices. The smart thermostat can control the operation of the device based on the environmental conditions and user preferences based on the past data captured and location.
For instance, the use of the Fraunhofer’s 15% potential savings from heating, smart thermostat saves almost 8.7 MMBtus per household per year on average. The use of the Fraunhofer’s 20% potential savings from cooling, smart thermostat saves almost 30 kWh per year per household.
On average, it almost saves almost 7-10% in cooling and 6-8% in heating. It saves the amount of almost USD 131 to USD 145 per year. The Ecobee has claimed that its use can save almost 23% on the energy bills.
The energy-efficient nature of the smart thermostat devices is driving the demand for the installation of these products in the households, which will ultimately drive the growth and development of the smart thermostat market in the United States.
- High level of awareness about the smart thermostat
The level of the awareness of the consumers regarding the smart thermostat and other smart home devices is in increasing trend. A New York contractor survey has accessed the familiarity of the people of New York regarding smart home technologies.
Among all the smart home technologies i.e. smart plug, smart lighting, smart thermostat, and smart appliance, the majority of the study participants were aware of the smart thermostat. Here, almost 42.5% of the study participants were very familiar with the smart thermostat and about 34% of them were somewhat aware of the smart thermostat.
This contractor survey concludes that customers have a relatively high level of awareness about smart thermostats. The high level of awareness about the use of smart thermostats will drive the growth and development of the smart thermostat market in the United States.
- Limited interest of the consumer towards remote energy management
In the context of the United Status, the interest of the consumers towards the management of the household energy consumption through remote access is limited.
For instance, A online survey conducted among the 4,604 online adults in the context of the United States has found that only 35% of the study participants were interested to have remote access to energy management and just 2% of them have already access the energy management remotely.
The limited interest of the people about energy management through remote access might restrain the growth and development of the smart thermostat market in the United States.
- Issues of hacking and privacy concerns
The smart thermostat is a part of the Internet of Things which enhances the functionality of the remote access of these devices. However, they can also be subjected to the issues of hacking and privacy concerns.
For instance, in the year 2019, the Nest camera and thermostat of a family of the United States have been hacked and the normal set temperature of 72 degrees has been changed to 90 degrees.
Along with this, the hacker threatened the family through the speaker in a downstairs security camera. This type of hacking-related issue might restrain the growth and development of the smart thermostat market in the United States.
Industry Challenges
- Issues related to the programming of smart thermostat
The programming of the smart thermostat is quite complex and the household owner needs the knowledge to understand how the smart thermostat works.
Because of this, some of the consumers might require professional help to install the smart thermostat to figure out the way of operation, use of the embedded software, and buttons.
It is quite challenging for the market players to develop the self-describing detailed manual book to assist the consumer in the operation of the multi-functional algorithm-based smart thermostat.
Technology Trends
The technological changes and adoption of new advanced technology are enhancing the functionality of the smart thermostat. Some of the key technological changes in the smart thermostat market in the United States are discussed as follows:
Digital assistant control: The integration of the digital assistant technology with the smart thermostat allows the control of the temperature through the use of digital devices such as Amazon Alexa, google assistant, apple Home kit, etc.
Remote accessibility: This technological component of the smart thermostat provides access to control the ambient temperature of the house through the smartphone and internet access by the downloadable mobile-based applications.
Learning capability: The smart thermostat is based on the algorithms which can learn our behavior & lifestyle of the owner and automatically maintain the changes in the room temperature.
Sensors: The smart thermostat consists of sensors that automatically check the occupancy patterns of the households and works in the programmed schedule when the people are at home.
Pricing Trends
The price of the equipment of the smart thermostat depends upon the type of technology brand name and application. The equipment cost of the EverSense smart thermostat of the Allure company is about USD 210 while the cost of the ecobee3 smart thermostat is about USD 249.
The cost of the lyric round smart thermostat and Lyric T5 of Honeywell company is about USD 199 and USD 149 respectively. The cost of the Nest Learning 3rd generation Thermostat is about USD 249 while the cost of the Voyager thermostat of the Venstar company is about USD 145.
The average retail cost of the thermostat ranges from USD 150 to USD 250 per unit.
Regulatory Trends
Some of the regulations directly or indirectly related to the smart thermostat market in the context of the United States are as follows:
The Code of Federal Regulations of the United States: According to it, each thermostat should be marked with the name of the manufacturer, the approval number, fixed temperature type, and temperature rating.
The Public Act 096-1295: According to it, the thermostat manufacturer should establish and maintain the program for the proper collection and management of the out-of-service mercury thermostat either individually or in collaboration with other thermostat manufacturers.
Market Size and Forecast
Globally, the total market size of the smart thermostat market is valued at USD 1.36 billion in 2019. The market value of the global smart thermostat market is expected to grow at a CAGR of 26% within the forecasted time horizon of 2020-2025 and its market size is expected to reach USD 8.78 billion by the year 2026.
The North American smart thermostat market accounts for a market share of almost 70% of the total global smart thermostat market and the market value of this region is valued at USD 0.95 billion in the year 2019.
The market value of the North America Smart thermostat market is expected to grow at a CAGR of 20.1% within the forecasted time horizon of 2020-2025 to reach USD 5.5 billion by the end of the year 2030.
In the context of the United States, almost 21% of households have a smart thermostat. The total market size of the smart thermostat market in the United States is valued at USD 16.7 million in the year 2019, increased from USD 12 million in the year 2017.
Its market value is expected to grow at a CAGR of almost 18% within the forecasted time horizon of 2020-2025. Its market value will reach USD 45.10 million by the end of the year 2025.
Based on the type of the distribution channel
- The retail channel segment is leading the market with a market share of almost 38.61% of the total thermostat market in the United States. The market size of this segment is valued at USD 6.45 million in the year 2019.
- The utility channel segment accounts for a market share of almost 15.27% of the smart thermostat market in the United States. The market size of this segment is valued at USD 2.55 million in the year 2019.
- The security channel segment accounts for a market share of almost 18.05% of the smart thermostat market in the United States. The market size of this segment is valued at USD 3.01 million in the year 2019.
- The HVAC channel accounts for a market share of almost 28.055% of the smart thermostat market in the United States. The market size of this segment is valued at USD 4.68 million in the year 2019.
Market Outlook
The smart thermostat market is expected to grow at the CAGR of 18% within the forecasted period of 2020-2025 because of growing adoption of smart home devices and its rising market, stringent government initiative for energy conservations, energy savings and reduction in energy bill costs, and high level of awareness about the smart thermostat.
Its market value will reach USD 45.1 million by the end of the year 2025.
Technology Roadmap
The adoption of innovative technologies is creating a favorable environment for the growth and development of the smart thermostat market.
For instance, the introduction of the sensors, digital control devices, remote accessibility is enhancing the functionality of the smart thermostat. The innovative advanced technological changes are driving the growth and development of the smart thermostat market in the United States.
Distribution Chain Analysis
The key stakeholders involved in the operation of the smart thermostat market in the United States are product designing and manufacturers, product distributors, retail sales, online sales, and end-users.
At first, the devices of the smart thermostat are designed, manufactured, and distributed to the consumer through online and retail sales. The major end-users of a smart thermostat are commercial, industrial, residential, and other sectors.
Competitive Factors
The key market players engaged in the smart thermostat market in the United States are focused on the development of the multifunctional and reliable thermostat.
Along with this, they are concerned about the development of the highly secure smart controlling system so that the hacking of smart thermostat devices can be prevented and controlled.
Key Market Players
Short profile of the key market players engaged in the smart thermostat market in the United States are as follows:
Alarm.com: It is the leading platform in the United States engaged in the sector of security and remote monitoring, intelligent automation, and energy management solutions.
Lux products: This US-based company is engaged in the development of a reliable manual, touch screen, programmable, and smart thermostat. Its most selling smart thermostat is energy star certified.
Venstar: It is one of the largest global leading companies in the sector of designing, manufacture, and supply of the thermostat and other energy management systems.
Nest Labs: The Nest Lab company is a brand of google engaged in the development of smart home products. Its major products are smart speakers, smart displays, streaming, smart displays, streaming devices, thermostats, smoke detectors, and others. It has its headquarter in California, US.
Honeywell International: It is the multinational company engaged in the field of aerospace, building technologies, performance materials, technologies, and safety & productivity solutions. The revenue of this company is valued at USD 41.8 billion.
Emerson Electric Co: It is a multinational corporation engaged in the development of the electrical equipment for industrial, commercial, and consumer markets. It has almost 205 manufacturing locations all over the world. Its most popular product is Sensi smart thermostat.
Carrier Corporation: It is the global company engaged in the manufacturing and distributing heating, ventilating, and air conditioning system. It has its headquarter in Syracuse, New York.
Strategic Conclusion
The smart thermostat market in the United States is growing at the rate of 18% because of the growing adoption of smart home devices and its rising market, stringent government initiative for energy conservations, energy savings and reduction in energy bill costs, and high level of awareness about the smart thermostat.
However, the limited interest of the consumer towards remote energy management, Issues of hacking and privacy concerns, and high installation cost of smart thermostat might restrain the growth and development of the smart thermostat market in the United States.
References
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Appendix
- HVAC= Heating, ventilation and air conditioning
- USD= United States Dollar
- CAGR= Compound Annual Growth Rate
