SMART THERMOSTATS MAY NOT SCALE UP: An important new study finds that “smart” thermostats do not have a statistically or economically significant effect on energy use.
The problem occurs when the technology is “scaled up” and distributed to a broader population, John List, an economist at the University of Chicago and one of the lead authors of the study, circulated by the National Bureau of Economic Research Monday, told Breanne in an interview.
This is what List describes as a “voltage drop,” or the phenomenon of something failing to achieve its intended objectives upon its expansion (as well as the title of his new book). List, who is also the chief economist for Walmart and has worked for other companies, such as Uber and Lyft, is known as a pioneer of field experiments in econometrics.
The findings: Popular smart thermostat devices, such as the ecobee and the Nest, advertise annual savings of up to 26% and 27%, respectively, on consumers’ annual heating and cooling bills.
But the new study—which examined data from 1,379 households over a period of 18 months—found major discrepancies between these statistics, which assumed certain behaviors, and their actual use by the general public.
Instead of saving energy, in fact, researchers found the devices actually slightly increased electricity and gas consumption, by 2.3% and 4.2%, respectively.
In the case of home thermostats, the problem wasn’t necessarily one of usability: In fact, researchers observed, nearly all users with the smart devices programmed them almost immediately, and many did so with energy savings in mind.
The problem was how often, and to what extent, users deviated from the devices’ programmed schedules: Users were more likely to override the devices’ scheduled setpoints in ways that used more energy – i.e. when cooling, they set temperatures colder; when heating, they set them warmer.
Ultimately, researchers found “little to no evidence” that the smart thermostats reduced household energy consumption.
And, “[viewed through] the lens of climate mitigation, our results provide little justification for the amount of subsidies directed towards smart thermostats; such technologies have no impact on energy use and associated greenhouse gas emissions,” the study concludes.
When designing the devices, engineers modeled their estimates based on best case scenarios, List explained.
“If Commander Spock was given one of these, he would install it and use it correctly. But unfortunately, most households are like Homer Simpson,” he told Breanne. “They receive the technology and they go in and they undo the good stuff— in this particular case, they undid the presets, or they undid the defaults that came from the manufacturer. And when households did that, they undid all the ‘good stuff,’ and engineers’ estimates of what we would save in terms of energy.”
That’s a big problem for policymakers who rely on engineers’ estimates: According to the EPA, 170 energy providers currently subsidize the purchase of smart thermostats, and more than half of households in 20 states are currently eligible for a rebate on such devices.
The Inflation Reduction Act also offers consumers up to thousands of dollars in financial incentives in exchange for making certain energy-efficient upgrades.
The study is ultimately a “cautionary tale about policymakers, and about us as voters and constituents,” List said. “Let’s make sure that when they claim these things will save the world and help everyone, that they’re truly talking about policy-based evidence—and what I mean by policy-based evidence, [I mean], what does that policy look like in the real world?”
“And then we can be much more confident that what we’re saying about the Inflation Reduction Act, or any kind of subsidy or tax, is an actual real effect that will happen in the real world,” he said.
Without that, it’s nearly impossible to gauge whether the products can work at scale: List said that the government must develop a “science of scaling” to avoid wasting taxpayer money on interventions that don’t work.
“It’s one thing to invent a technology, it’s another to get people to buy it,” List said. “It’s third altogether, to get them to use it in both a cost-effective and energy-efficient way. And that’s what happened in our particular experiment.”