Smart Thermostat Market - Growth, Trends, COVID-19 Impact, and Forecasts (2021 - 2026)

Market Overview

The smart thermostat market was valued at USD 988.7 million in 2020 and expected to reach USD 3396.36 million by 2026 and grow at a CAGR of 23.1% over the forecast period (2021-2026). Lighting and other household appliances consume a considerable amount of energy and presently there is a dire need to use these energy resources efficiently. Therefore, governments are emphasizing on the use of smart devices in homes.

• The main factors driving the need for smart thermostat are the convenience, energy conservation, energy tracking, and need for an increase in potential savings. For example, Ecobee claims its gear can save an average of 23 percent off bills whereas Google's Nest claims its systems can save between 10 and 12 percent on heating and 15 percent on cooling.
• The BYOT (Bring-your-own-Technology) trend is expected to stimulate the growth of the market over the forecast period. Consumers have independently begun purchasing smart Wi-Fi enabled thermostats capable of receiving demand response control signals. Additionally, with a wi-fi connection and smart thermostats, virtual assistants, like Amazon Alexa, or Google Assistant, are increasingly being used to control and monitor the home temperature, program schedules, or manage the Air conditioning.
• It was estimated that around 60.5 million Americans used virtual personal assistants and voice-controlled speakers at least once a month, according to an investment firm Cowen & Co. Also, in 2017, 24% of Americans used Amazon Echo and 31% used Google Home for home control settings following music, shopping, and requesting information applications. With the increase in the use of virtual assistants in home control, the forecast period is likely to witness the exponential adoption of smart thermostats.
• Covid-19 Impact: Smart thermostat market is highly dependant upon China for hardware manufacturing. According to Business Standard, the Chinese exports were badly affected by Covid-19 as the exports declined by 15.7% in April. The decline in the exports put Smart thermostats manufactures in a tough position. Furthermore, the rise in tariffs on Chinese manufactured product by U.S. has also added pressure on Smart Thermostat manufacturers like Ecobee who are dependent on China for hardware.

Scope of the Report

These thermostats are termed as 'smart‘, due to the inherent capabilities of being able to communicate with IoT devices within a smart building, ability to learn with AI capabilities, active geo-fencing features, reduce energy consumption, and ability to communicate with emerging virtual private assistants. Smart thermostats refer to the devices that allow remote connectivity and can be managed through a handheld device, finding its applications in residential and commercial sectors. These thermostats can be wired and wireless with same features but different installation process.These are the devices that are connected and allow remote connectivity in the consumer sector.

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Key Market Trends

Increasing Demand for Energy-Saving Devices

• According to the US Energy Information Administration (EIA), the global energy demand grows at 2.1 % per year to 2040 with the current stated policies scenario. The demand surge will raise the electricity share in 2040 to 24 %. The use of technologies, changes in government policies, developing economies and market conditions are driving the growth of low-carbon sources to maintain the environment levels. Electricity consumption has a direct effect on the carbon footprint as electricity generation requires the burning of non-renewable resources and leads to the carbon footprint.
• HVAC systems consumed 38% of the delivered energy in buildings in 2019, this percentage is going to grow in the coming years. The need to save electricity expenses and unnecessary energy consumption made by HVAC systems has to lead increase in the usage of Smart Thermostats. There are various brands in the market with the aim of sustainable future Ecobee, Nest Labs, Siemens AG, Emerson electric to name a few. The usage of smart thermostats is also backed up by governments of the United States, Germany, United Kingdom, etc.

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