The communicating and smart thermostat market is set to reach $4.4 billion in annual revenue in 2025, according to new figures from Navigant Research.
According to a new report from Navigant Research, Smart Thermostats, “an array of distribution channels is helping to drive the market for advanced thermostats” after years of being ‘just a thermostat.’ The report analyzes the market and future for communicating and smart thermostats, noting that “the latest technology advancements have only just begun to gain traction” for a market which has been around for decades.
Smart thermostats like the Nest Smart Thermostat, which we first heard about back in January 2012, and which has since grown to be one of the most popular and attractive advanced thermostats, have hit upon the recent trend in consumer technology with an environmental edge. Home energy management has become the hot new piece of technology for those willing to fork out the money for expensive gadgets, but the benefits in electricity savings around the home are repeatedly being highlighted.
Further advances in smart thermostat technology are also regular occurrences in headlines. Most recently, WattTime launched a new service which will allow consumers the opportunity to choose between clean electricity and fossil fuel-generated electricity.
All of these recent developments are behind the increase in popularity which Navigant Research believes will see the annual global revenue for communicating and smart thermostats, and associated software and services, grow from $1.1 billion in 2016 to $4.4 billion in 2025.
“In the next decade, smart thermostats are expect to account for almost half of annual thermostat shipments,” said Paige Leuschner, research analyst at Navigant Research. “Uptake of these and communicating thermostats is expected to escalate as software and services increase the value of thermostats through more advanced capabilities, intelligence, and insights, and as more thermostats are incorporated into utility efficiency and demand response programs.”
Communicating and Smart Thermostat Device and Software and Services Revenue by Region, World Markets: 2016-2025
Navigant predicts that the growth will largely be driven by the North American market, which will increase from $829.6 million in 2016 to almost $1.9 billion in 2025. Europe and Asia Pacific will follow, growing to revenues of $1.1 billion and $1.3 billion respectively.
In addition to the sheer popularity of the market segment, other market drivers identified by Navigant Research include the broadening of distribution channels, the analytics provided by advanced thermostats, a desire for more energy efficiency enabling devices, and the integration of advanced thermostats with utility programs. This last is of paramount importance, as utilities have recognized the multiple benefits of including advanced thermostats in their offerings. Not only does it serve the customer, but in tandem with an increased awareness of and desire for clean energy and energy efficiency, not to mention lower electricity bills, consumers have the opportunity to take the strain off utilities in some situations by minimizing their use during peak hours.
There are comparatively few real market barriers to the growth of advanced thermostats, though cost and general awareness remain the two big sticking points, as they do for any new technology. Utilities must also capitalize upon the benefits of smart thermostat technology, and provide clear information to consumers on the financial and energy benefits.