Friday, 1 August 2014
Why are utility companies giving away Smart Thermostats?

Utility companies throughout the United States and Canada are offering their customers free Smart Thermostats.  Here's the offer from San Antonio's CPS:  "A FREE Honeywell programmable thermostat… you don't have to install it yourself, and you have complete control. Change the temperature at home -- anytime, anywhere -- from the Internet….''  Here's the offer from New York's ConEdison:  "In addition to your FREE thermostat, app and installation a $300 value you will also receive a $25 thank you check."  One utility company extends a $50 rebate to business customers ($25 for residential customers) in addition to the free thermostat, plus each can receive an additional $25 for participating in a pilot study.  Why are utility companies doing this?  [Note: Nashville's NES does not currently offer a similar program].

What's the catch?
Surveys show most homeowners are unwilling to pay for systems to assist with home energy management.  So, utility companies found clever ways to entice their customers into allowing these devices into their homes, along with innovative rate plans and incentives to get them on board. During the summer, demand for electricity is greatest.  In order to maintain reliable energy service without the threat of brown outs or even black outs the utility company may adjust your thermostat up a maximum of 3 degrees for brief periods of time during the day.  However, the utility company is quick to point out that the customer is always in control and may override the settings at any time.

The goal is to reduce energy consumption during periods of high energy use, and to delay the need for costly power system upgrades the cost of which is inevitably passed on to consumers in the form of higher rates.  Reducing energy usage also helps to reduce air pollution, since most electricity in the U.S. is produced by coal-fired power plants. Nashville power comes primarily from coal fired steam plants in Gallatin and Cumberland City.

Let your thermostat do the savings for you
Even if your utility company does not offer free thermostats (Nashville Electric Service does not), having a programmable or smart thermostat can save you money and offers some real benefits.  Reducing air conditioner usage when no one is at home is just one example.  Some thermostats can "learn" your daily habits and temperature preferences, and "learn" how to cool your house using the least amount of energy.  Check out some of the many other features of smart thermostats in our Smart Thermostat Poll

What the future holds
Recently, there has been a push by telecommunications providershome improvement stores and cable companies like Comcast to get into home energy management.   Utility companies are seeking new and creative ways to save/curtail electricity usage.   For example, this May, Reliant Energy launched a "Free Nights" plan, offering no charge for energy used from 10 pm to 6 am.  Ultimately, having control rest in the cloud promises to be a much more profitable and scalable way to approach the energy management market.

Posted on 08/01/2014 10:01 AM by Tony Anderson
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