Smart thermostats to realize $1.4 billion in revenue by 2020
Although the market for smart thermostats has struggled to gain traction, recent developments indicate that growth is likely to accelerate
Worldwide revenue from smart thermostats will grow from $86 million in 2013 to almost $1.4 billion in 2020, according to a recent report from Navigant Research.
Smart thermostats, also known as programmable communicating thermostats (PCTs), offer integrated features that surpass the basic sensing and control functions of traditional thermostats.
Although the market for smart thermostats has struggled to gain traction, recent developments — particularly the purchase of smart thermostat maker Nest Labs by Google, for a reported $3.2 billion — indicate that growth is likely to accelerate.
“Large retailers, including Lowe’s and The Home Depot in the United States and B&Q in Europe, have begun selling smart thermostats, signaling that sales of these devices could grow in coming years,” says Bob Lockhart, research director with Navigant Research. “It remains to be seen, though, whether marketing efforts on behalf of these retailers will raise the interest of a large pool of customers who are not already planning to replace an existing thermostat.”
For their part, utilities remain cautious about investing in programs and tools that provide incentives for consumers to regulate their energy use. Likewise, vendors have struggled to produce user-friendly solutions with proof of substantial cost savings that will motivate customers outside of the energy-conscious segment.
However, the combined factors of increased energy awareness, rising interest in home automation and security tools, and more user-friendly solutions have led to an uptick in shipments for smart thermostats and have revived a sense of optimism and excitement on behalf of vendors and stakeholders.