New research from Berg Insight revealed Monday that the number of North American and European homes with a smart thermostat grew by 81 percent to 5.8 million in 2015. The North American market recorded a 78 percent growth in the installed base of smart thermostats to 4.5 million. In Europe, the total number of homes with a smart thermostat grew by 90 percent year-on-year to reach 1.4 million.
Berg Insight forecasts that the number of homes with smart thermostats in Europe and North America will grow at a CAGR of 54.5 percent during the next five years to reach 51.1 million in 2020. North America will remain the largest market at the end of the forecast period with 32.2 million homes that have smart thermostats, whereas the installed base in Europe is expected to reach 18.9 million homes.
This data follows Friday’s data that the number of smart homes in Europe and North America reached 17.9 million in 2015. North America is positioned as the top most advanced smart home market and the region had an installed base of 12.7 million smart homes at the end of the year, a 56 percent year-on-year growth.
The strong market growth is expected to last for years to come, driving the number of smart homes in North America to 46.2 million by 2020, which corresponds to 35 percent of all households. The European market is about two to three years behind North America in terms of penetration and market maturity.
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 service providers.
The North American smart thermostat market is led by Nest, Honeywell and Ecobee that each has sold more than a million thermostats, primarily through the retail, utility and professional installer channels. These companies are joined by vendors such as Radio Thermostat Company of America and RCS that have gained traction especially in the whole-home system channel through partners such as ADT, Vivint and Alarm.com. Other contenders on the North American market include Emerson, Lennox, Trane and Venstar.
In Europe, 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 0.32 million homes. At the end of 2015, the Centrica owned utility British Gas had approximately 0.3 million smart thermostat users in the UK. Centrica also has 0.2 million smart thermostat users in North America through its Direct Energy operations.
Consumers embrace smart thermostats primarily due to the potential for energy savings, increased comfort and convenience. For energy companies, smart thermostats open up new possibilities to introduce consumer-friendly demand response and energy efficiency programmes. These programmes can enable significant capital savings 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.
Another critical initiative by an energy company is the smart thermostat solution offered by Eneco in the Netherlands which has signed up around 0.15 million users for its Toon solution. Additional participants in the European smart thermostat market include Climote, Danfoss, Heatapp, Heat Genius, Netatmo, Ngenic, RWE and Tado.