Smart Thermostats To Reach $2.3 Billion In Annual Revenue By 2023
Ever since Nest “redeveloped” the thermostat to be a “smart thermostat,” the consumer technology industry has been well aware of clean technology. This awareness will lead to substantial growth, according to Navigant Research, which released a report predicting the smart thermostat market will reach nearly $2.3 billion in annual revenue by 2023.
Nest may not have been the first to make a “smart thermostat,” but it was certainly the beginning of smart thermostats being a consumer technology trend. Taking the idea of a smart thermostat — allowing for anywhere-control, learning technology — and blending it with Apple’s sense of design (Founder and CEO of Nest, Tony Fadell, led the team that created the first 18 generations of the iPod and the first three generations of the iPhone) made the thermostat more than just a gadget for early adopters: It became a must-have gadget for households all across America, and soon, the world.
And as Navigant notes in its press release, “after only a handful of years in existence, the market for smart thermostats is now poised for growth.”
The report, wittily titled “Smart Thermostats,” predicts that annual global revenue from smart thermostats and their associated software and services will grow from $146.9 million in 2014 to $2.3 billion in 2023.
“It’s not just end users that are interested in smart thermostat technologies,” says Lauren Callaway, research analyst with Navigant Research. “Today, adoption is increasing in several different customer segments, as utilities, energy retailers, small businesses, and homeowners realize the value in using these devices to manage their energy use and save money.”
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Navigant highlighted three separate technology segments it felt were the main offerings: communicating thermostats, smart thermostats, and software and services. As a result of the varied functions and uses these segments offer, Navigant notes that “offerings appeal to several different customer segments, not just end users.” In North America and Europe, interest in smart thermostats is reaching beyond the end-user, and appealing to utilities and energy retailers, as well as small businesses.
We’ve covered the explosion of smart thermostat offerings for a few years now, ever since Nest crossed our paths. The two market leaders have been for some time Honeywell and Nest, followed by a variety of other companies attempting to meet the popularity of the market leaders.
In a report from late 2013, Navigant released a leaderboard of smart thermostat companies:
However, despite the success of smart thermostats like those offered from Nest and Honeywell, Navigant Research discusses several market inhibitors, including a general confusion regarding just how to best use a communicating or smart thermostat.
“Recent research on in-home thermostat usage has indicated that consumers struggle to properly understand the functions and usage for thermostats in general,” the authors of the report write. “As a result, concern over effectiveness is an ongoing issue for utilities, especially those that have already instigated programmable thermostat programs.”
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