Do Smart Homes Save Money? How Long It Takes to Break Even
If a smart device is any device that connects to and communicates through the internet, then a smart home is a home where such smart devices lead to improvements in day-to-day life. Of the many reasons to smarten up a home, saving money is arguably the most enticing.
But can smart devices really save money in a practical time frame? In this article, we’ll explore the five most money-saving smart devices and how long it’d take for each one to recoup its upfront cost through long-term savings.
Smart thermostats are the most popular and most extreme example of how a smart home can truly save you money. It’s also one of the fastest devices for recouping initial costs.
Nest, the leading smart thermostat brand as of this writing, conducted two independent studies on real users across 41 states in the U.S. to see what their energy bills looked like before and after installing the Nest Smart Thermostat. On average, they saved 13 percent on heating and cooling.
ecobee, Nest’s primary competitor in the smart thermostat arena, conducted an internal analysis and found that ecobee users saved an average of 23 percent on heating and cooling when using the ecobee3 Smart Thermostat.
According to a 2014 report [PDF] by the U.S. Department of Energy, the average U.S. household spends about $2,200 per year on utilities, with about 48 percent of that being heating and cooling: $1,056.
At 13 percent cost reduction, the Nest would save about $137 per year. With an approximate retail cost of $245, it would take about 43 months to break even. As for the ecobee3 with 23 percent reduction, yearly savings would amount to $242. With an approximate retail cost of $249, you’d break even in 12 months. (Note that the ecobee3 is most efficient in larger homes.)
So, one to two years. That’s incredible! Learn more in our comparison of Nest vs. ecobee thermostats . If you decide to go with a Nest, see our tips and tricks for maximizing Nest savings . Either way, one thing is clear: a smart thermostat should be one of your first smart devices !
Smart Lawn Sprinklers
According to YardMap, the average American yard is about 0.225 acres. It can be way smaller in urban areas and more than twice as large in rural areas, but we’ll use this for our calculations.
Proper lawn care involves one inch of water per week for natural grass. The national average cost for one inch of water for one acre of yard is $40.75. That comes out to about $9.17 per week or $477 per year for the average American lawn. These numbers come from Realtor.
The Rachio Smart Sprinkler Controller connects to your existing lawn sprinkler system and optimizes its watering routine. The makers claim that Rachio can save up to 50 percent off your lawn watering bill! Best case scenario, that’s an annual savings of $238. With an approximate retail cost of $179, it could pay for itself in 9 months.
But let’s be realistic. Yes, the Rachio turns off when it rains. Yes, it reduces water usage when it’s cold. Yes, it spreads out the watering schedule for maximum soil absorption. Yes, it can control up to 16 zones independently. Even so, you probably won’t see 50 percent savings — if we assume a more conservative 30 percent, the break even point is closer to 15 months.
Note: Don’t forget that the Rachio is one of several smart devices that can actually increase the value of your home ! If you plan on selling anytime soon, it’s something to think about.
Smart LED Bulbs
LED bulbs can save a lot of money over incandescent and fluorescent bulbs, but is it worth it to go from normal LED bulbs to smart LED bulbs?
According to the U.S. Energy Information Administration, the average national cost of electricity in the residential sector for July 2017 was $0.1312 per kWh.
As of this writing, a normal 60W-equivalent Philips A19 LED bulb (8W) costs about $1.65 while a 60W-equivalent Philips Hue A19 LED bulb (10W) is closer to $15, for a difference of $13.35. The normal bulb costs about $0.0010 per hour while the Hue bulb costs about $0.0013 per hour, for a difference of $0.0003 per hour.
It would take about 44,500 hours of use to break even between a normal LED bulb and a Hue bulb. That’s precariously close to the 50,000-hour average lifespan of LED bulbs. But remember, incandescent bulbs are more expensive ($0.0079 per hour) so you still come out ahead, breaking even around 1,660 hours.
Note that Philips Hue bulbs are notoriously overpriced . If you opt for a cheaper alternative with less brand recognition, you can recoup the difference much quicker. For example, the Sengled A19 Dimmable LED Bulb is a little over half the price!
Smart Moisture Sensors
The cost of repairs can range from $500 for minor issues to $3,000+ for plumbing issues (plus $2,000+ for mold cleanup).
The longer it takes to discover water damage, the more expensive it becomes to repair. Therefore the earlier you can detect water leaks, the less you’ll pay in repairs and the more you’ll save in the long run. That’s where smart moisture sensors come into play.
A D-Link Wi-Fi Water Sensor (our review ) may seem pricey per unit, and you’ll need about 3-5 around your house in the most water-prone areas to maximize coverage, but it only takes ONE disaster for it to pay for itself several times over.
Consider a hypothetical water event that costs $1,000 to repair because you caught it early. Perhaps it would’ve cost $2,000 if it had gone another month before signs appeared. As long as you spent less than $1,000 on smart water sensors, you’ve come out ahead. And since they’re reusable, they’ll keep saving you money time and time again.
Without a doubt, smart water sensors are absolutely worth the cost . In fact, sensors in general are one of the more effective ways to smarten up a home. Check out these smart sensors every home should have .
Saving Money Is Great, But Isn’t the Main Point
To be fair, not all smart home products exist to save you money. While smart locks and smart security systems can indirectly save money through theft prevention and recovery, you also have things like smart doorbells, smart speakers, and smart media players that exist solely for convenience and entertainment.
At the end of the day, smart homes aren’t that expensive . For the price of an Xbox One or PlayStation 4, you can outfit your home with quite a lot smart goodies. So yes, it may take a year or two for certain devices to recoup their costs, but consider that a bonus. A smart home is more about convenience and luxury.
What do you want in your smart home? Is money crucial or are you willing to splurge for convenience and luxury? Let us know in the comments below!
Image Credit: Syda_Productions/Depositphotos
Affiliate Disclosure: By buying the products we recommend, you help keep the site alive. Read more.