A smart thermostat doesn't make your furnace or air conditioner more efficient. It saves money by running them less: easing off when you're asleep or away, then bringing the house back before you notice. How much that's worth depends on what you do today.
Up to about 10% of your heating and cooling cost, per the DOE's estimate for thermostat setbacks. ENERGY STAR puts the average household's heating and cooling at more than $900 a year, so that's up to about $90 a year; if you already turn the temperature down at night and when you're out, you'll save much less.
Where the savings come from
- Setbacks while you sleep or are away. A cooler house in winter and a warmer one in summer means less running time.
- Schedules you don't have to remember. The savings come from setbacks that actually happen every day.
- Geofencing. Some models detect when everyone has left and set back automatically, then recover before you get home.
- Learning. Some learn your routine and build the schedule for you.
Each feature saves only if it changes how your system runs compared with now.
Who saves the most
- The most: households that leave the temperature fixed day and night, or often forget to turn it down when leaving.
- Less: households that already set back manually and consistently.
- Least: homes that are occupied all day with a steady temperature.
The savings in dollars
ENERGY STAR puts a typical household's heating and cooling at more than $900 a year. The DOE's up-to-10% figure assumes setbacks of about 7 to 10°F held for roughly 8 hours a day, from its Energy Saver guide. Ten percent of $900 is about $90 a year.
That $90 is the top of the range, not the middle. It describes a home that ran one fixed temperature and now sets back every night and every time the house empties. The closer your habits already are to that, the less of the $90 is left to capture.
| Your current habit | Likely setback savings |
|---|---|
| Fixed temperature, never set back | up to about 10%, near $90 a year |
| Means to set back but often forgets | a large share of that range |
| Already sets back by hand every day | little extra, mostly convenience |
| Occupied all day at a steady temperature | little, with little to set back |
The rows below the first are not extra savings to add on; each describes how much of that first-row ceiling a household actually reaches. Your own number falls somewhere between the full $90 and almost nothing, set by how far today's schedule already drifts from a flat line.
Smart vs programmable: what actually differs
Both types save the same way, by running the system less during setbacks, and neither makes the furnace or air conditioner any more efficient. A programmable thermostat captures those savings only if someone sets a schedule and then leaves it alone. The savings evaporate the moment occupants override it or never program it at all.
A smart thermostat automates the setback instead of relying on memory. Geofencing sets the house back when phones leave and recovers it before anyone returns; learning builds the schedule from the pattern it observes. That reliability, not extra efficiency, is where any dollar gap between the two comes from.
What ENERGY STAR certification means
ENERGY STAR certifies smart thermostats based on actual field data showing they deliver savings, under a specification in effect since January 1, 2017. Certified models also enter a low-power standby mode when idle, and many work with utility programs that pay incentives.
Heat pumps need a gentler approach
With a heat pump, a deep setback can backfire. When the thermostat calls for a big temperature rise in the morning, it may switch on the electric backup strips, which cost more per unit of heat than the compressor. Use a thermostat set up for heat pumps, which ramps up gradually, and keep setbacks modest.
The backup strips are plain resistance heat, with a coefficient of performance of 1, while the heat pump itself can deliver up to about 3 times as much heat per unit of electricity, per ENERGY STAR. So heat from the strips can cost up to roughly 3 times as much as heat from the compressor, which is why an aggressive recovery can erase a night's setback savings.
Payback
NREL's residential efficiency database (REMDB) puts a smart thermostat's installed cost at about $350 at the mid estimate, in a low-to-high range of roughly $200 to $550, in 2023 dollars. At up to about $90 a year in savings, that is about $350 divided by $90, close to four years; the cheaper the thermostat and the more you save, the faster it pays back.
Payback is the installed price divided by the yearly saving, so it comes fastest in a household that wasn't setting back before. For one already setting back consistently, the yearly saving is smaller, so payback stretches out, and a rebate shortens it by cutting the upfront price.
Rebates and utility programs
The federal 25C credit no longer applies to equipment placed in service after December 31, 2025, so for a 2026 purchase the money lever is local. Many utilities rebate a qualifying smart thermostat directly, and many run demand-response programs that pay a bill credit for letting the utility nudge your setpoint a few degrees on peak days.
The DSIRE database lists incentives by state and utility, which is the fastest way to see what your address qualifies for. Our HVAC tax credits and rebates guide covers what remains after the federal credit ended.
Frequently asked questions
How much money does a smart thermostat save?
Up to about 10% of heating and cooling cost, per the DOE, or up to about $90 a year against ENERGY STAR's average of more than $900. Actual savings depend on how much you set back today.
Is a smart thermostat worth it?
Usually, if you don't already set back your temperature consistently. If you do, the savings are small, and the value is mostly convenience and remote control.
Are smart thermostats better than programmable ones?
They save the same way, through setbacks. The difference is that smart thermostats make the setbacks happen automatically, which is where most programmable thermostats fall short.
Do smart thermostats work with heat pumps?
Yes, if configured for a heat pump. Keep setbacks modest so recovery doesn't trigger the electric backup heat.
Do smart thermostats really save money?
They save when they change how your system runs, not on their own. The DOE credits setbacks with up to 10% off heating and cooling, but a home that already turns the temperature down by hand has little left to gain. The up-to-10% is a ceiling for someone going from a flat temperature to consistent setbacks, so a modest result usually means the setbacks were already happening.
Do smart thermostats save more in summer or winter?
The up-to-10% applies to the combined heating-and-cooling total, so more of the dollars land in whichever season runs your system harder. A heating-dominant cold climate sees most of the saving in winter, a cooling-dominant hot climate in summer. The thermostat does not use a different percentage by season; the savings just follow the bigger load.
Will a smart thermostat save money if someone is home all day?
Less, because the savings come from setbacks and an occupied house usually holds one comfortable temperature. A modest overnight setback still helps while everyone sleeps. For an all-day-occupied home the main value is convenience and remote control rather than a large cut to the bill.
Sources & References
- U.S. DOE: Energy Saver 101, Home Cooling (PDF), thermostat savings up to 10%
- ENERGY STAR: Smart Thermostats (certification; heating and cooling over $900 a year)
- NREL: National Residential Efficiency Measures Database (REMDB), 2024 (installed cost)
- DSIRE: Database of State Incentives for Renewables & Efficiency