Consumer Technology

Published on June 7th, 2016 | by Joshua S Hill

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Smart Thermostat Market Set To Reach $4.4 Billion In 2025, Says Navigant

June 7th, 2016 by  

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.

nest_protect_and_nest_thermostatSmart 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-21

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.


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I'm a Christian, a nerd, a geek, and I believe that we're pretty quickly directing planet-Earth into hell in a handbasket! I also write for Fantasy Book Review (.co.uk), and can be found writing articles for a variety of other sites. Check me out at about.me for more.



  • Armchair Hydrogeologist

    Don’t buy a smart thermostat unless you have 5 wires or more going to your furnace. You need a common wire despite the claims of the smart thermostat companies as they haven’t figured out how to reliably steal power without a common wire.

    Besides that, don’t throw out your old thermostat either. These new ones break a lot. Usually at the worst time and you’ll be shorting your 24vac red wire to your white wire instead if drinking your eggnog.

    • AaronD12

      My EcoBee3 thermostat came with a special (and kinda large) adapter that allows it to be powered from a four-line system.

      I’ve heard the Nest thermostats do break frequently, but I haven’t heard the same about the EcoBee3 thermostats. I also don’t want my household information going to Google, so no Nest for me. (It’s REALLY hard to de-Google-fy your life!)

      It is a good suggestion, though, to keep your old thermostat. I put the old Honeywell thermostat on the wall when I moved. 😉

      • Armchair Hydrogeologist

        What they really need is a wireless one that can get powered off an AC plug somewhere, it would have wifi + zigbee. Then you have a zigbee rx with the relays at your furnace that you screw onto the wire terminals that robbs the Rh/Common 24VAC there for it’s zigbee powered rx. This would then work for everyone.

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