|
flevyblog
The Flevy Blog covers Business Strategies, Business Theories, & Business Stories.
|
Editor's Note: Take a look at our featured best practice, ISO 50001:2018 Energy Management System Training (126-slide PowerPoint presentation). Unlock Energy Efficiency with ISO 50001:2018 Energy Management System Training Kit Learning Objectives: Understand ISO 50001-2018 Energy Management System (EnMS) and its significance. Explore the principles of effective energy management. Discover new approaches to energy management for [read more]
* * * *
Contractors who perform HVAC repairs and plumbing services hear a variation of this story every winter. A customer calls Fuse Service HVAC, Electrical & Plumbing for help with a leaking water heater. They also mention that their upstairs has been cold since November. It turns out the smart thermostat, installed two years ago, has been on Hold the whole time. Crews doing furnace installation in San Jose see the same thing with a shorter heating season.
The hardware is rarely at fault. A thermostat only switches your system on and off at better moments than you would, and that’s the whole trick. The savings are real. They’re also smaller than the box implies, and easy to cancel out in the first ten minutes.
According to Energy Star, the majority of smart thermostats reduce your annual heating and cooling expenses by approximately 8%, or $50. 10–12% for heating and closer to 15% for cooling, according to Nest’s own study.
These are averages over thousands of residences, and averages obscure the two most important categories. People who already turned the heat down by hand every night save almost nothing. People who left a dumb thermostat parked on 72 all winter save a pile. Work out which one you are before you start calculating payback.
The hold button does more damage than anything else. One cold evening you bump it to 74, tap hold, and the weekly program never runs again. The app still shows a schedule nobody follows.
Wiring is next. Many older houses lack a C-wire. So, the thermostat uses power from the heating call. This can cause short cycling, odd temperature readings, or a rebooting screen at 2 AM. A twenty-dollar adapter will fix that.
Improper placement leads to all sorts of issues. A sensor on an outside wall, on a lamp, or in a hallway that no one uses leads to heating rooms that don’t need to be heated.
Heat pumps have other requirements. Lower the temperature by eight degrees overnight. In the morning, the system turns on backup electric heat to warm up. This strip heat uses more energy in an hour than the savings from the overnight setback. Three or four degrees is the ceiling.
Geofencing set up on one phone in a four-person household is decoration. None of this is a hardware fault. It’s smart thermostat settings nobody checked again after week one.
Sometimes the setup is fine, and the house is the problem. Leaky ducts in a vented attic, an oversized furnace that short cycles, bare windows on the north side. No schedule beats that.
Occupancy matters more than people expect. If someone works from home five days a week, there’s no empty-house window to take advantage of. You’re left with whatever the overnight setback provides.
Your utility rate matters too. On a flat rate, pre-cooling the house ahead of peak hours does nothing at all. On time-of-use pricing, it’s where most of the smart thermostat energy savings come from. Read the rate schedule first.
Comparing this January’s bill to last January’s tells you about the weather, not the thermostat. One cold snap swamps anything a schedule can do.
Runtime is the honest number. Most apps log how many hours the system ran each day. Divide that by the month’s heating degree days, which your utility publishes, and compare the same month across two years. If runtime per degree day dropped, it’s working.
Give it a full season before you judge. And open the monthly energy report once, since it usually shows the exact day you hit hold and forgot.
For most households, somewhere between $30 and $70 a year. That’s a two- to five-year payback on a $130 unit, longer if an electrician had to run a wire. Utility rebates shorten it a lot, and plenty of people never file for one.
Larger smart thermostat savings benefit homes with good insulation, high electricity costs, and away hours. You should anticipate remote access and notifications rather than a lower bill if you currently maintain a strict manual timetable.
Buy one if you want to witness the heating cycles when you are away and stop it from running unnecessarily when no one is present. Don’t bother purchasing it to finance your holiday. Before setting up the app, first calculate how long the house is empty this week. Then, create the schedule using this information, not the app’s previous pattern. It will take twenty minutes to see if the product is worth buying. It can help save money on heating or serve as a holiday decoration.
You can download in-depth presentations on Energy Management and 100s of management topics from the FlevyPro Library. FlevyPro is trusted and utilized by 1000s of management consultants and corporate executives.
For even more best practices available on Flevy, have a look at our top 100 lists:
These best practices are of the same as those leveraged by top-tier management consulting firms, like McKinsey, BCG, Bain, and Accenture. Improve the growth and efficiency of your organization by utilizing these best practice frameworks, templates, and tools. Most were developed by seasoned executives and consultants with over 20+ years of experience.
