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It’s not unreasonable to consider your return on investment for expensive products that promise to provide you with a monetary benefit. Smart air conditioning (AC) systems are a good example of this, as manufacturers claim they will help reduce cooling and energy costs through efficient management of the air conditioning system. But dollar for dollar, how long does it actually take for these systems to pay off, at least in terms of recovering initial costs?
Turns out it’s not very long. But it also depends on a lot of things. When calculating average annual savings, it takes you about one to two years to recoup the full costs of a smart thermostat, depending on price, but that’s without any additional fees or installation costs. If you install the thermostat yourself, the cost of the device will likely be recouped within this time frame. If you need substantial additional hardware or accessories, the upfront costs will be much higher and will take longer to recoup, likely stretching over a few more years.
Energy Star and the Environmental Protection Agency estimate savings from smart thermostats at 8% on heating and cooling per year, which equates to about $50 per year. However, this number may vary depending on the system. Google estimates savings of 12 to 15 percent for Nest devices, which would bring your savings to $130 to $150 per year. Ecobee estimates that its users can save 26% on average (over $200 per year). Given that a 4th Generation Nest Learning Thermostat costs $280 full price and an ecobee Smart Thermostat Premium Kit costs $260, it would take a few years to recoup those costs. Since smart thermostats can last between seven and ten years, you’d also more than double your investment at these prices over the life of the device.
Not so fast…there are a lot of variables
These costs and savings apply only to the smart thermostat, and only in case you already have an AC cooling or heating system. Overall costs vary depending on the smart thermostat you choose, your local electricity rates, and any additional fees or expenses. For example, if you buy the smart thermostat and have it professionally installed, this will significantly increase the overall cost. And certainly, if you install a new air conditioning system, including a compressor and an air handler, that will also increase costs.
A smart HVAC system doesn’t necessarily require a whole new heating and cooling setup. You need a smart thermostat and energy-efficient equipment, whether it’s an air conditioner or a heat pump. If your existing equipment is not energy efficient or breaks down, then you may want to consider a complete replacement. A high-efficiency HVAC system can cost an average of $20,000 or more. It may be more expensive for high-end equipment and depending on where you live. Meanwhile, a whole-house heat pump can cost around $5,000 for the unit alone, and anywhere from $10,000 to more than $20,000 for the entire system, new ductwork included.
It should also be noted that smart air conditioning systems and smart thermostats bring many additional benefits that can improve your life. Energy savings, personalized automations, away or vacation modes when you’re away from home, and remote access are just some of these benefits. Convenience and peace of mind are two things that are difficult to really put an accurate price on. There are other devices that you can also pair with an air conditioner or cooling system to improve efficiency, but of course they also increase the overall price.
In reality, you won’t get any money back in your pocket
It’s important to talk about the savings you get from a smart air conditioning system or installing a smart thermostat. When discussing where they actually save you money, it’s worth noting that you typically won’t get anything back in your pocket through discounts or incentive programs. Smart HVAC systems simply operate more efficiently than traditional setups when using energy. They do this by reducing the amount of energy needed to operate and making better use of the energy they consume through smarter, more automated applications.
A Nest learning thermostat, for example, learns your habits over time and better understands the temperatures you prefer. It then adjusts schedules on the fly to reduce energy demand without making things uncomfortable for you and your family. It can raise the temperature limit by half a degree to save a few cents one day, and in the long run, the money saved adds up because it runs your cooling or heating system less often.
This is also not a guaranteed benefit. It depends on how you use the smart thermostat and whether or not you have specialized modes enabled. If you use the thermostat by manually setting temperatures, you will only really benefit from the energy-efficient hardware compared to the smarter built-in modes. That’s not to say that new gear isn’t worth it, just that your mileage may vary, as is the case with most technology of this caliber.
