Smart Thermostat Market Size & Share Analysis - Growth Trends & Forecasts (2023 - 2028)

The Report Covers Smart Thermostat Market Trends & Technology and it is Segmented by Type of Thermostat (Wired and Wireless), End-User (Residential and Commercial Sectors), and Geography. The market sizes and forecasts are provided in terms of value (USD million) for all the above segments.

Smart Thermostat Market Size

Smart Thermostat Market Summary
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Study Period 2018 - 2028
Market Size (2023) USD 4.45 Billion
Market Size (2028) USD 11.12 Billion
CAGR (2023 - 2028) 20.10 %
Fastest Growing Market Asia Pacific
Largest Market North America

Major Players

Smart Thermostat Market Major Players

*Disclaimer: Major Players sorted in no particular order

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Smart Thermostat Market Analysis

The Smart Thermostat Market size is expected to grow from USD 4.45 billion in 2023 to USD 11.12 billion by 2028, at a CAGR of 20.10% during the forecast period (2023-2028).

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 the use of smart devices in homes.

  • The increasing adoption of smart homes across the globe, the occurrence of the COVID-19 pandemic, the emergence of IoT-enabled HVAC systems, the surging adoption of smart home voice assistants, and government regulations pertaining to increasing the energy efficiency of buildings are some of the factors propelling the demand for Smart Thermostat Market over the next couple of years.
  • Moreover, the critical factors driving the need for smart thermostats are convenience, energy conservation, energy tracking, and the need for an increase in potential savings. Also, 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.
  • A wireless network is the most widely used connectivity technology in smart thermostats as it helps the customers to bring down the maintenance and installation costs, along with providing higher scalability and flexibility, and enhanced connectivity.
  • The installation of wireless connectivity makes smart thermostats more compatible with smart devices such as tablets, smartphones, and laptops for operation. Further, the increasing adoption of smart homes in the United States is expected to fuel the demand for smart thermostats based on wireless connectivity technology.

Smart Thermostat Market Trends

This section covers the major market trends shaping the Smart Thermostat Market according to our research experts:

Increasing Demand for Energy-saving Devices

  • As smart thermostats aid in saving electricity, owing to such characteristics, the demand for smart thermostats is expected to grow over time and has been influenced by the augmented demand for energy-efficient solutions.
  • According to a study conducted by Nest Labs (a part of Google LLC), the company compared the energy bills of real people in 41 states before and after the installation of Nest Learning Thermostats. The study was conducted via two independent studies - from real Learning thermostats and real homes with real families.
  • As per the result, on average, the Nest Learning Thermostat saved approximately 10% to 12% on heating and approximately 15% on cooling. Further, based on typical energy costs, the company estimated an average savings of approximately USD 131 to approximately USD 145 per year. That means the Nest Learning Thermostat paid for itself in under two years. Such positive results are expected to promote the adoption of smart thermostats in the market globally during the study period.
  • According to the US EIA, the global energy demand will grow 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 environmental levels. Electricity consumption has a direct effect on the carbon footprint as electricity generation requires the burning of non-renewable resources and leads to a carbon footprint.
Smart Thermostat Market: Manufacturer sales of electronic thermostats, UK, in GBP million, 2015-2021

North America to Hold Significant Market Share

  • North America has been the major contributor to the revenue generated by smart thermostat products and services globally, owing to the increasing adoption of the technology across the residential sector of the region.
  • Owing to this rise in smart homes and smart home devices, connected thermostats are also expected to witness an increased adoption, particularly in North America, being the early adopter of new technological encroachments. The increasing dependency on smartphones and mobile apps is only set to drive the demand for smart home applications as smartphones offer an intuitive medium via different applications for controlling smart home technologies.
  • Smart homes are accelerating, with nearly 30 million US households predicted to add smart home technology soon. The products consumers are looking to integrate into their homes include connected cameras (40%), video doorbells (26%), and connected light bulbs, thereby fueling the demand for the smart thermostat application among the smart solutions.
  • The addition of advanced technologies, like AI and predictive analytics, gives a notion of the increased price of allied thermostats. Therefore, the market has been further boosted by active government/state-level association initiatives to make the products affordable to the end consumers across residential applications.
Smart Thermostat Market - Growth Rate by Region

Smart Thermostat Industry Overview

The smart thermostat market is fragmented and competitive. Due to the government's support and promotion for the uptake of smart devices in residential buildings, many smart home vendors have entered the market. Some of the key players in the market include Alphabet Inc. (Nest Labs - Google), Honeywell International Inc., Ecobee, Schneider Electric SE, and Lennox International Inc., among others. Some recent developments in the market include:

In September 2022, Autogrid entered into a partnership with Mysa with an aim to launch utility-scale virtual power plants using smart thermostat technology for grid modernization. AutoGrid would be leveraging its VPP platform in collaboration with Mysa's smart thermostat technology for electric heating and cooling to provide a scalable and comprehensive dispatch solution for both technologies and other IoT solutions from various thermostat and Water Heater Controls platforms.

In May 2022, Ecobee launched its new Ecobee Smart Thermostat Premium, which would be replacing its existing flagship model, SmartThermostat with Voice Control, with new features.

Smart Thermostat Market Leaders

  1. Nest Labs Inc.

  2. ecobee

  3. Emerson Electric Co.

  4. Johnson Controls

  5. Honeywell International

*Disclaimer: Major Players sorted in no particular order

Smart Thermostat Market Concentration

Smart Thermostat Market News

  • September 2022: Aqara, a leading provider of smart home products, announced the launch of its Radiator Thermostat E1 to automate hydronic radiators, making the heating systems smarter for improved energy efficiency and comfort. Based on the Zigbee 3.0 protocol, the Thermostat is anticipated to support the future-proofing Matter standard via an OTA update of the compatible, Zigbee 3.0-based Aqara hub.
  • April 2022: Voltus, Inc., a distributed energy resource (DER) software technology platform, collaborated with Resideo, a global provider of home comfort and security solutions and a distributed energy resource management system (DERMS), and Google Nest, launched its first bring-your-own-thermostat program that would deliver both demand response capacity and ancillary services.

Smart Thermostat Market Report - Table of Contents

  1. 1. INTRODUCTION

    1. 1.1 Study Assumptions and Market Definition

    2. 1.2 Scope of the Study

  2. 2. RESEARCH METHODOLOGY

  3. 3. EXECUTIVE SUMMARY

  4. 4. MARKET INSIGHTS

    1. 4.1 Market Overview

    2. 4.2 Industry Value Chain Analysis

    3. 4.3 Industry Attractiveness - Porter's Five Forces Analysis

      1. 4.3.1 Bargaining Power of Suppliers

      2. 4.3.2 Bargaining Power of Buyers

      3. 4.3.3 Threat of New Entrants

      4. 4.3.4 Threat of Substitute Products

      5. 4.3.5 Intensity of Competitive Rivalry

    4. 4.4 MARKET DYNAMICS

      1. 4.4.1 Market Drivers

        1. 4.4.1.1 Increasing Demand for Energy-Saving Devices

        2. 4.4.1.2 Effectiveness & Convenience in Controlling HVAC Devices at Home

      2. 4.4.2 Market Restraints

        1. 4.4.2.1 High Product Price and Installation Costs of Smart Thermostats

      3. 4.4.3 Market Opportunities

        1. 4.4.3.1 Proliferation and Integration of Smart Home Devices

        2. 4.4.3.2 Internet Penetration and Demand for Smart Phones

  5. 5. MARKET SEGMENTATION

    1. 5.1 By Type

      1. 5.1.1 Wireless

      2. 5.1.2 Wireless

    2. 5.2 By End-User Vertical

      1. 5.2.1 Residential

      2. 5.2.2 Commercial

    3. 5.3 Geography

      1. 5.3.1 North America

      2. 5.3.2 Europe

      3. 5.3.3 Asia-Pacific

      4. 5.3.4 Rest of the World

  6. 6. COMPETITIVE LANDSCAPE

    1. 6.1 Company Profiles

      1. 6.1.1 Nest Labs Inc.

      2. 6.1.2 Resideo Technologies, Inc.

      3. 6.1.3 ecobee

      4. 6.1.4 Emerson Electric Co.

      5. 6.1.5 Lennox International Inc.

      6. 6.1.6 Alarm.com Inc.

      7. 6.1.7 LUX Products Corporation

      8. 6.1.8 APX Group Inc.

      9. 6.1.9 Johnson Controls PLC

      10. 6.1.10 Netatmo SA

      11. 6.1.11 Tantalus Systems Corporation

      12. 6.1.12 tado GmbH

      13. 6.1.13 Centrica Hive Limited

      14. 6.1.14 Siemens AG

    2. *List Not Exhaustive
  7. 7. INVESTMENT ANALYSIS

  8. 8. MARKET OPPORTUNITIES AND FUTURE TRENDS

Smart Thermostat Industry Segmentation

Smart thermostats refer to 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 the same features but a different installation process. These are the devices that are connected and allow remote connectivity in the consumer sector. Thermostats are termed smart due to the inherent capabilities of being able to communicate with IoT devices within a smart building, the ability to learn with AI capabilities, active geo-fencing features, reduced energy consumption, and the ability to communicate with emerging virtual private assistants.

The study on Smart Thermostat Market covers segmentation by Type of Thermostat, including Wired and Wireless, End-User, including Residential and Commercial Sectors, as well as Geography. The market sizes and forecasts are provided in terms of value (USD million) for all the above segments.

By Type
Wireless
Wireless
By End-User Vertical
Residential
Commercial
Geography
North America
Europe
Asia-Pacific
Rest of the World

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Smart Thermostat Market Research FAQs

The Smart Thermostat Market size is expected to reach USD 4.45 billion in 2023 and grow at a CAGR of 20.10% to reach USD 11.12 billion by 2028.

In 2023, the Smart Thermostat Market size is expected to reach USD 4.45 billion.

Nest Labs Inc., ecobee, Emerson Electric Co., Johnson Controls and Honeywell International are the major companies operating in the Smart Thermostat Market.

Asia Pacific is estimated to grow at the highest CAGR over the forecast period (2023-2028).

In 2023, the North America accounts for the largest market share in the Smart Thermostat Market.

Smart Thermostat Industry Report

Statistics for the 2023 Smart Thermostat market share, size and revenue growth rate, created by Mordor Intelligence™ Industry Reports. Smart Thermostat analysis includes a market forecast outlook to 2028 and historical overview. Get a sample of this industry analysis as a free report PDF download.

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