Nest thermostat

Marcela Gara / Resource Media via Creative Commons

In Illinois, smart thermostats seen as key energy management tool

Illinois’s largest utility, state regulators, environmental and consumer advocates recently rallied together in Chicago  in support of an inconspicuous but powerful gadget: the smart thermostat.

Consumers have been relatively slow to adopt the energy-saving technology, which leverages sensors and WiFi to learn a consumer’s behavior and automatically adjust thermostat levels on the fly. But a wide range of energy stakeholders see great potential in better, smarter temperature controls, and they are joining forces to boost adoption rates.

It’s one small but not insignificant piece of a broader effort to overhaul the nation’s energy system all the way from the power plant across to the power outlet. Smart thermostats – like smart meters – offer both consumers and utilities more insight into how energy is used (and wasted). When aggregated across many users, smart thermostats have the potential to work in concert to significantly curb energy consumption during peak demand.

In a press conference last week, ComEd announced the goal of doubling the number of smart thermostats in Illinois households this year to 100,000. To help entice consumers, the utility has rolled out an instant rebate option worth up to $150 when paired with rebates with other Illinois gas utilities. Major smart thermostats retail for between $150 and $250 before rebates.

“With just a few taps on a smart thermostat app, customers can manage their household temperature while away from home, avoiding unnecessary energy use and costs,” said ComEd President & CEO Anne Pramaggiore, in a press release. Smart thermostats have helped consumers cut cooling costs by between 10 and 20 percent, according to ComEd.

Comparison to smartphones

Paralleling how smartphones revolutionized telecommunications, smart thermostats have the potential to dramatically enhance home energy use, advocates say. Heating and cooling make up just under half of all residential energy consumption, according to the U.S. Energy Information Administration.

Smart thermostats are seen as a major improvement over programmable thermostats, which rely on the consumer to manually schedule when and how their thermostat runs.

“For a long time, folks like us have been advocating installing programmable thermostats but behaviorally people were not programming those programmable thermostats,” says David Jakubiak, a spokesperson for the Environmental Law & Policy Center (ELPC), which is partnering with ComEd on the effort. The advent of smart thermostats have helped solve that problem, Jakubiak says, “because the thermostat could learn your behavior and program itself.”

In 2015, ComEd, ELPC and Citizens Utility Board, a consumer-advocacy group, launched an initiative aimed at getting 1 million of the devices in Illinois homes by 2020. To date, about 80,000 homes in Illinois use a smart thermostat.

It’s an ambitious goal, but the market is seeing significant growth. Last year, there were just 7.8 million smart thermostats installed across all of North America, according to Berg Insight, a market research firm based in Sweden. That’s a 64 percent increase over the previous year. By 2021, Berg Insight says there will be smart thermostats in 43.4 million homes in North America.

When deployed widely, smart thermostats also have the potential to help utilities and grid operators better manage and curb energy use across the broader system. Nest, a popular smart thermostat company, offers a program called Rush Hour Rewards, which automatically turns down consumers’ heating or cooling in exchange for incentives from the utility. When aggregated across an entire service territory, these kinds of incremental savings can help utilities lower demand peaks, thereby reducing the need for building out additional power generating capacity.

ComEd’s AC Cycling program employs Nest Rush Hour Rewards to help regulate spikes in cooling demand on hot days. Customers can receive up to $40 in incentives for signing up for the program.

As of last April, 30 percent of households in the U.S. have access to a Nest Thermostat rebate or Rush Hour Rewards program, according to Nest.

“The best way for consumers to control their electric bills, and help the environment, is to reduce consumption,” said Brien J. Sheahan, Chairman of the Illinois Commerce Commission, a regulatory body, in a statement. “Smart thermostats give consumers greater control of, and visibility into, their energy use which promotes conservation and helps save money.”

Security issues

Smart thermostats aren’t for everyone. Homes that use radiators or window-air-conditioning units can’t reap the benefits of self-programming thermostats. The technology requires a fast and reliable internet connection as well. Some smart-thermostat programs require that consumers own their own homes, making the technology less ideal for renters.

Like other connected devices, smart thermostats also raise concerns about privacy and security. At a hacking conference last summer, two security researchers took advantage of a bug in an unnamed smart thermostat to deploy what is considered the first-ever ransomware proof-of-concept for a smart thermostat.

But, for advocates, smart thermostats represent a win-win-win. Consumers can save money on their energy bills, utilities can more easily hit efficiency targets, and overall energy consumption can be reduced.

“As our electricity system is in transition, reductions in demand help to offset the need to replace one dirty fuel with another dirty fuel,” Jakubiak says. “Nobody wants to see us building a bunch of natural gas plants as we retire coal plants, and so one of the keys in doing that is – not only building robust renewables – it’s making sure that people are using energy smartly so that there’s lower demand.”

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