The number of North American and European homes with smart thermostats grew by 67 percent to 10.1 million in 2016, according to a new report from research company Berg Insight.
The rate of growth was fastest in Europe, where the total number grew by 77 percent year-on-year to reach 2.3 million. In North America, the growth was slower at 64 percent, but the installed base was larger at 7.8 million homes.
Analysts at Berg Insight forecast the number of smart thermostat-owning households to continue to grow at a compound annual growth rate of 50 percent over the next five years, to reach 78.1 million in 2021. North America will remain the largest market, with 43.4 million homes having smart thermostats, compared to 34.7 million in Europe.
“Smart thermostats is a particularly attractive opportunity in the smart home market, as these systems are of great interest for consumers, energy companies and HVAC [heating, ventilation and air conditioning] service providers,” said Anders Frick, Senior Analyst, Berg Insight.
Consumers are embracing smart thermostats primarily due to the potential for energy savings, increased comfort and convenience. For energy companies, they open up new possibilities to introduce consumer-friendly demand response and energy efficiency programmes. These programmes can enable significant capital savings, according to Berg Insight, as lower peak load can reduce expenditures on reserve power generation and the need to purchase energy on the spot market.
“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,” added Frick.
The North American smart thermostat market is led by Nest, Honeywell and Ecobee, joined by vendors such as Radio Thermostat Company of America and RCS, which have gained traction especially in the whole-home system channel through partners such as ADT, Vivint and Alarm.com. Additional participants in the North American market include Emerson, Lennox, Trane and Venstar.
In Europe, leading smart thermostat vendors include the European based eQ-3 and Centrica, as well as the North American vendors Nest and Honeywell.
EQ-3’s smartphone-controlled radiator thermostats have been installed in more than 0.35 million homes. At 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 North America through its Direct Energy operations.
Other contenders on the European smart thermostat market include Climote, Danfoss, Heatapp, Heat Genius, Netatmo, Ngenic, RWE and Tado.