U.S. Smart Thermostat Market Size, & Share COVID-19 Impact Analysis, By Product (Connected, Standalone, and Learning), By Technology (Wired and Wireless), By Application (Residential, Commercial, and Industrial), and Country Forecast, 2022-2029

The U.S. smart thermostat market size was valued at USD 1.09 billion in 2021. The market is projected to grow from USD 1.27 billion in 2022 to USD 3.86 billion by 2029, exhibiting a CAGR of 17.2% during the forecast period. Based on our analysis, the market exhibited an average growth of 16.1% in 2020 as compared to 2019.

Smart thermostat, an app-enabled smart home device, allows occupants to remotely control the home’s heating and cooling temperature through internet-connected devices. Using advanced Artificial Intelligence (AI), the device learns home schedules and preferences over time, allowing it to conserve energy and significantly minimize the utility bill. In this scope, we have considered companies that provide these devices such as Emerson Electric Co., Honeywell International Inc., Johnson Controls, Venstar Inc., and others. Many companies launched new touchscreen smart thermostats for multiple functionalities of smart homes.

For instance,

• In March 2022: Bosch Thermotechnology Corp. launched a new touch screen smart thermostat “Bosch Connected Control (BCC100)”. It offers multiple functionality for smart homes including Wi-Fi connectivity, remote monitoring, and control of home HVAC systems.

COVID-19 IMPACT

COVID-19 Limited the Demand for Smart Thermostat Among Customers which Hindered Market Growth

The outbreak of COVID-19 has disturbed normal life and prompted individuals, governments, and organizations to reconsider their business activities. The construction industry plays a vital role in the country’s economic development and progress. The global construction sector, especially smart homes, buildings, and city projects, has been impacted by the COVID-19 pandemic. Construction project delays had cascading effects on the economy. The main reasons for project delays are due to supply chain issues and lack of investment in commercial and retail real estate. But in recent years, during the pandemic, the popularity of the home automation industry has increased among users and lockdown limitations have forced individuals to spend more time in their homes. As a result, a larger number of traders have entered the market. Also, more businesses entering the market and a rising proportion of online sales have expanded the range of home automation products. For instance,

• In 2020, Entergy Arkansas, LLC launched an online marketplace for customers to purchase discounted smart thermostats, air purifiers, dehumidifiers, and LED bulbs.

LATEST TRENDS

Growth in Smart Buildings and Smart Projects to Boost the Market Development

The urbanization of society continues to upsurge, with a focus on smart cities, where the Internet of Things (IoT) solutions and connected technologies are used to improve public safety, critical infrastructure, city lighting, traffic flow, energy efficiency, and traffic congestion. The aim is to make the city a better place to live, work, and play while reducing its carbon footprint.

Furthermore, air conditioning and heating, ventilation, lighting, security, and electricity are all automated in smart buildings. Sensory data, such as carbon dioxide concentration, indoor and outdoor temperature humidity, and occupancy status, are required for automation. Data is used in a mix of technologies to make smart buildings more energy efficient. Since HVAC systems consume roughly half of a building's energy, smart buildings employ smart type of thermostats that automate HVAC settings and therefore can learn the temperature preferences of residents or occupants.

• According to a report by the Massachusetts Institute of Technology, buildings consume roughly 40% of the energy consumed in the U.S. and account for one-third of global CO₂ emissions. Making buildings more energy-efficient is not only a cost-cutting measure, but it is also an important climate change mitigation strategy. As a result, "smart" buildings are increasingly becoming the norm around the U.S.

DRIVING FACTORS

Increasing Adoption of Internet of Things (IoT) Solutions and Smart Homes to Accelerate Market Growth

Smart thermostats are used in homes to control temperature and humidity while allowing fresh air flow and maintaining air quality. Further, from local or remote locations, one can monitor system performance and respond to system-generated alarms. This device use wireless communications, internet connectivity, mobile devices, and cloud computing to save energy, control HVAC system operation, and reduce costs.

IoT platforms are one of the most important global economic drivers of the smart home market. At home, IoT-based devices offer energy-saving features. According to GSMA Intelligence 2020 report, IoT connections are expected to reach approximately 5.1 billion in North America by 2025, up from 2.8 billion in 2019. With high-speed technology such as 5G, it shows that within some years, there would be a massive cluster of sensors and devices. Such growing proliferation of IoT devices in North America is likely to surge the demand for smart homes toward a higher growth trajectory.

Thus, the rising demand for smart homes is anticipated to boost the market in the future.

RESTRAINING FACTORS

High Manufacturing Costs and Installation Complexities of the Product to Hinder Market Growth

Improved control systems and innovative smart thermostats require significant investments. As a result, it may be difficult for small and medium-sized businesses) to enter into the market. Also, consumers with low spending power could find it difficult to afford the price.

Since these devices are often hardwired into the home, setting them up precisely might be challenging unless the technician is tech-savvy. For optimal operation and failure prevention, HVAC systems with smart thermostats need fine-tuning and specific manufacture of parts during installation. As a result, competent technicians are required to install these thermostats that are integrated with HVAC equipment properly. If the installation is not completed by a qualified professional, the end-user might have to pay extra for repairs in the future, or the HVAC systems may not function properly. As a result, the need for experienced labor raises the cost of system installation.

Therefore, high installation complexity, manufacturing cost, and various compatibility requirements are expected to hinder the growth of the market.

SEGMENTATION

By Product Analysis

Increasing Adoption of Connected Smart Thermostat among End-users to Propel the Market Growth

On the basis of product, the market is divided into connected, learning, and standalone. Connected segment is anticipated to hold the maximum the U.S. smart thermostat market share during the forecast period. The technologies such as Bluetooth, WiFi, Zigbee, NFC, and others are used to provide connected smart devices.

However, the learning segment is expected to witness rapid growth during the forecast period owing to its intuitive and intelligent features offering excellent customer experience. The demand is growing for learning products owing to their efficiency in saving maximum energy.

By Technology Analysis

Rising Adoption of Wired Smart Thermostat Applications to Surge the Market Development

On the basis of technology, the market is bifurcated into wired and wireless.

Wired segment to gain maximum share during the forecast period. A wired smart thermostat is the early product implemented across commercial, industries, and some residential applications.

The wireless segment is projected to gain rapid growth during the forecast period. The wireless device offers direct temperature control through smartphones and apps via an internet connection. The capability to remotely control the thermostat from any location drives the wireless segment. The wireless technology automatically regulates the temperature and helps in maximizing efficiency and comfort.

By Application Analysis

Increasing Demand for Smart Connected Devices to Surge Demand for Residential Applications 

Based on application, the market is segmented into commercial, industrial, and residential.

The residential is expected to gain a dominant share during the forecast period. The rising smart home concept is anticipated to boost the demand for smart thermostat in the U.S. Similarly, the increasing demand for smart and connected devices for homes is likely to drive demand in residential applications. It is helping homeowners with minimum energy bills by efficiently monitoring the temperature required. Some of the popular thermostats for home applications include Emerson Sensi Touch Wi-Fi Thermostat, ecobee3 lite, Honeywell RCHT8612WF, Nest Learning, and more.

Industrial segment is expected to gain steady growth during the forecast period. Various industries such as healthcare, manufacturing, pharmaceuticals, oil & gas, chemical, and other industries need to keep the environmental temperature in continuous check. Here, these thermostats help in controlling and monitoring the heating and cooling of industries.

COUNTRY INSIGHTS

The growing trend of implementing energy-saving devices across residential, commercial, and industrial applications is expected to boost the U.S. market growth. Similarly, the U.S. government is encouraging the adoption of energy-efficient products to counter future energy crises today. Some of the initiatives taken by the U.S. government include energy star products, energy star certified new homes, a national action plan for energy efficiency, commercial building design, and more. For instance,

• In June 2021, Texas-based energy providers remotely raised the thermostats' pre-set temperature of their customers to reduce strain on-grid and save energy during peak events. As per the company’s report, the increase in set temperature was in line with the energy-saving program.

KEY INDUSTRY PLAYERS

Focus on Business Expansions to Fuel Key Players’ Market Share

The market witnesses a substantial competitive intensity due to the presence of a massive number of companies. The companies are focusing on growing their consumer base to gain a competitive edge. Consequently, leading players are considering numerous strategic initiatives, such as mergers & acquisitions, and partnerships, to stay competitive in the market. Moreover, key players in the market are introducing new products to attract and retain their customer base. Also, continuous investment toward research and development of product offerings is thriving the market growth. Thus, by adopting such corporate strategies, players sustain their competitiveness in the market.

List of Key Companies Profiled:

• Emerson Electric Co. (U.S.)


• Lennox International Inc. (U.S)


• Venstar Inc. (U.S.)


• Bosch Thermotechnology Corp (Germany)


• Carrier Corporation (U.S.)


• Honeywell International Inc. (U.S.)


• Johnson Controls (Ireland)


• Alarm.com Holdings, Inc. (U.S.)


• Schneider Electric (France)


• Daikin Industries, Ltd (Japan)


• Vivint Smart Home, Inc. (U.S)


• Alphabet Inc. (Google LLC) (U.S)


• Ecobee (Canada)

KEY INDUSTRY DEVELOPMENTS:

• March 2022: Emerson Electric Co. collaborated with Itron, Inc., a provider of energy and water resource management products and services. Through this collaboration, Emerson aims to offer smart thermostats as part of Itron’s Bring Your Own Device (BYOD) for direct install demand response programs.


• March 2022: Johnson Controls released an advanced control ventilation configuration for the TEC3000 Series Smart Thermostat. This feature enables building operators to form air variations to increase air quality.


• January 2021: Google LLC collaborated with Goodman Manufacturing Company, L.P. to launch the Nest Thermostat E+ Goodman Program. With this partnership, Goodman’s dealers can fulfill the demand of homeowners for automation with Google Nest Thermostat.


•  December 2020: Lennox International Inc. partnered with mechanical equipment provider FPX.com to implement FPX’s CPQ application. The integration of CPQ application enables Lennox to transform quoting process and improve its sales of heating, ventilation, and air conditioning products.


• January 2020: Carrier Corporation partnered with Ecobee to offer Ecobee Smart Thermostat Pro and Ecobee3 lite pro with voice control to customers for enhancing customer experience. These new device offer users personalized comfort and improved energy savings at home.

REPORT COVERAGE:

The study on the market includes prominent areas worldwide to get a better knowledge of the industry. Furthermore, the research provides insights into the most recent industry and market trends as well as an analysis of technologies that are being adopted quickly worldwide. It also emphasizes some of the growth-stimulating restrictions and elements, allowing the reader to obtain a thorough understanding of the industry.

REPORT SCOPE & SEGMENTATION