Smart thermostat growth fastest in Europe

The smart thermostat is proving to be an attractive opportunity in the smart home market.
Published: Thu 20 Jul 2017

Smart thermostats grew by 67% to 10.1m in 2016 across the US and Europe, according to a new report from research company, Berg Insight. The growth rate was slower than Europe at 64% but the installed base was larger at 7.8m households.

Analysts at Berg Insight predict that the number of smart thermostat-owning households will continue to grow at a compound annual growth rate of 50% over the next five years, reaching 78.1m in 2021. It states that the US will remain the largest market though, with 43.4 million homes having smart thermostats, compared to 34.7m in Europe.

European and US market leaders

While the US smart thermostat market is led by Nest, Honeywell and Ecobee, joined by vendors such as Radio Thermostat Company of America and RCS, Europe’s leading vendors include the European based eQ-3 and Centrica, as well as US vendors Nest and Honeywell.

EQ-3’s Smartphone-controlled radiator thermostats have been installed in more than 0.35 million homes. By the end of 2016, the Centrica-owned utility British Gas had 0.55 million smart thermostat users in the UK. Centrica also had around 0.40 million smart thermostat users in the US through its Direct Energy operations.

Other contenders on the European smart thermostat market include Climote, Danfoss, Heatapp, Heat Genius, Netatmo, Ngenic, RWE and Tado.

Microsoft has just returned to the smart home space with its GLAS smart thermostat. Built by Johnson Controls, the company that invented the first electric room thermostat, GLAS not only taps into Cortana voice controls but also the Windows 10 IoT Core operating system and Azure Cloud computing services. While its cost and release date have yet to be revealed, Microsoft rivals Amazon and Google continue to develop a variety of smart-home services and devices powered by their respective clouds.

Potential for energy savings

Anders Frick, Senior Analyst, Berg Insight says that the smart thermostat is an attractive opportunity in the smart home market because of its potential for consumers, energy companies and HVAC [heating, ventilation and air conditioning] service providers to save energy and increase comfort in a convenient way.

For energy companies, the smart thermostat opens up the opportunity to introduce consumer-friendly demand response and energy efficiency programmes. The report points out that these programmes can enable significant capital savings as lower peak load can cut expenditures on reserve power generation and the need to purchase energy on the spot market.

Frick says: “Adding intelligence to residential heating and cooling systems furthermore opens up new opportunities for HVAC service providers. Predictive maintenance and remote diagnostics can allow repair and maintenance activities to be streamlined and done more efficiently.”


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