Proponents hope winter weather boosts smart thermostat adoption in Chicago

An exceptionally cold winter including last month’s polar vortex means high utility bills for many Chicago-area customers.

Proponents of a smart thermostat program hope the harsh weather will encourage more people to take advantage of rebates and incentives to install Nest or other smart thermostats to reduce their energy use and bills while increasing their comfort.

Since the program launched in October 2015, about 45,000 ComEd customers have installed smart “learning thermostats” with the help of a rebate from the utilities ComEd, Peoples Gas, North Shore and Nicor gas.

About 80 percent of those customers have chosen Nest’s popular thermostat, while thermostats from Ecobee and other companies are also eligible. The utilities and Nest have a goal of installing one million smart thermostats in their service area, which includes about three million customers, in five years. At just 1/20th of that amount so far, the program doesn’t appear on track to meet its goals. But backers are hopeful it will grow exponentially as awareness spreads.

ComEd is offering customers a $100 rebate for smart thermostats, and the gas companies are offering an additional $50 rebate, for a total of up to $150. The Nest thermostat retails at $249.

While programmable thermostats have long been available, many people have found them as difficult to program as the eponymous VCR.

Smart thermostats anticipate the conditions or needs in a home and respond automatically, without residents having to adjust or even pre-program the thermostat. The Nest Learning Thermostat figures out whether people are at home based on their cell phone location and motion sensors. And users are asked to manually set the thermostat for one week, during which the thermostat “learns” what temperature residents prefer at different times of days and sets itself.

“Typically heating and cooling devices use a thermometer to decide how long they should run; you set the temperature on the wall, then reset it when you want to change it,” said ComEd director of energy efficiency services George Malek. “Or there are ones you program, but they were so hard and difficult to program that no one really did it. This (learning thermostat) technology is great because it incorporates ways to sense whether or not someone is at home, then is able to set the temperature accordingly. And it’s connected so you can make changes remotely through your phone.”

Meeting efficiency goals

Illinois’ recently passed energy bill mandates that ComEd and downstate utility Ameren increase their energy efficiency investments, with ComEd ordered to reduce cumulative energy demand by 21.5 percent by 2030, and Ameren ordered to reduce it by 16 percent. Outfitting customers with smart thermostats can help meet those goals. Ameren does not have a rebate program.

“There are a lot of utility companies doing very innovative things with smart thermostats, but ComEd and Peoples Gas were the first to come out and say we’re investing in smart thermostats and educating customers about great technologies that can save them money and promote energy efficiency,” said Nest’s business development-energy partnerships leader Yeye Zhang. “There’s no way we would have had this program be so successful and so big so quickly (without the rebate). Having energy efficiency standards is absolutely a help for utilities to be incentivized to actually create these big programs.”

“We see the smart thermostat as a measure that can help us reach our goals, to save electricity every year as part of our energy efficiency portfolio,” added ComEd’s Malek. “If you look at the shifting demographics of our customers, we’re fundamentally serving a different type of customer who wants control and wants to save money and energy. Maybe energy efficiency doesn’t really capture their imagination, energy efficiency is very dry, it’s hard to make it sexy. But these smart thermostats are like smart phones, people say, ‘I want that,’ not just ‘I need it’ but, ‘I want it.’”

Zhang said that while studies on the exact impacts of the thermostats are still ongoing, they predict it will help customers save 10-12 percent on electricity bills and 15 percent on gas bills. And potential savings are likely to grow as utilities offer more programs utilizing smart meters and smart appliances like thermostats, and rewarding customers for demand response and other behavior enabled by smart technology.

Currently, customers with Nest thermostats who enroll in ComEd’s AC Cycling program can get an additional $10-a-month credit during the four summer months, for a total of $40 a year. ComEd said there are about 8,000 customers currently enrolled.

“The Nest product has a platform where we can go in and say, ‘Today is a day we’d like to control your cooling compressor,’” Malek said.

“Once customers have these smart thermostats on their walls, there’s so much more you can do,” added Zhang. “It’s not just saving energy, on top of that customers can enroll in demand response programs and additional energy efficiency response programs.”

The Environmental Law & Policy Center and the Citizens Utility Board are partners in the program. Backers say the reach of the incentive program goes beyond the thermostats that have been installed thanks to rebates, since the program is raising awareness of the thermostats even among customers who live in other areas or don’t seek the rebate.

The ELPC estimates that one million smart thermostats across the region would mean about $80 million to $120 million a year in total savings for ratepayers and 709,000 metric tons of carbon dioxide pollution avoided.

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