For years now, makers of smart thermostats have been claiming that the devices can pay for themselves by saving you money on your annual heating bills. Proof of that has been elusive. But now Google (GOOG) has injected some new data into the debate.
Nest, which Google acquired last year for $3.2 billion, has a feature in its sleekly designed thermostat that “learns” your habits and will automatically turn down the heat or cooling when you’re not at home. The company has said the Nest can save homeowners as much as 20% of heating costs.
Not everyone is going to experience that kind of gain. What if, for example, you were already in the habit of turning down your old thermostat when you left for work? Would you still get that 20% savings after you bought your Nest? As one unhappy Nest customers recently wrote in an Amazon.com (AMZN) review: “After installing Nest, my energy usage is slightly higher than this time last year actually, despite it being a bit less cold. If you are the kind of person that forgets to turn a conventional thermostat down when you leave the house, Nest will remember for you. But if you are conscientious enough to be turning your old thermostat down already, Nest adds nothing. Yes, it is stylish, but I am disappointed.”
The average Nest customer, though apparently fares pretty well. In a report released today, Google says that, for the first time, it has solid evidence that smart thermostats will save you money no matter what the situation. It cites two independent reports and another of its own as evidence. On average, the reports suggest that the Nest thermostat saved customers about 10% to 12% on their heating bills and 15% on their cooling bills compared to properly programmed thermostats.
Google says those results translate to an estimated average savings of $131 to $145 a year for Nest owners. But there’s just one problem: The studies were conducted before the dramatic drop in oil and natural gas prices over the past several months. Given that oil prices have fallen by half and natural gas prices by almost as much, the savings now would be roughly half of what Google estimates. A Nest costs $249 to purchase, plus another $100 to have it installed. (You can install it yourself, but just check out the disgruntled online consumers reviews written by do-it-yourselfers.) That’s a five and a half year payback. And the payback is even longer if your house needs more than one Nest.
