How Much Money Can You Really Save With A Smart Home?

How Much Money Can You Really Save With A Smart Home?

Tyler Durden's picture

It has become conventional wisdom that the wave of the future is “smart home” technology from smart utility meters that read a houses energy usage automatically to smart lights that turn off when not in use. The industry has been in development for years, but moved to the forefront of the start-up world when Google bought Nest Labs last year for more than $3B. Nest Labs makes a variety of smart home devices including thermostats and smoke alarms.

Smart home technology marries two of the most talked about trends in business right now – the internet of things and green technology. Given the excitement around these products then, it is little surprise that smart home devices from Nest and others have been able to command astronomical price tags in home improvement stores across the country.

How useful are smart home devices really though? A recent report by the British government suggests that the smart home revolution may be starting to hit some bumps in the road. The British government wanted to begin a national rollout of smart meters to all households across the UK this year. Smart meters are utility meters outside of a home that automatically read energy usage by a house and send that information wirelessly to the utility company. This avoids companies having to estimate bills for customers, cuts down on the costs of meter reading by utility company employees, and can provide consumers with useful information to save money by monitoring energy usage in real time. The most obvious application is in the area of electric meters, but gas meters and water meters also have potential as well.

As the British are discovering with smart meters, what sounds good on paper does not always work in reality. Problems that are cropping up include difficulty with people who are switching energy companies, labor shortages for the necessary 50 million plus installations of smart meters, and technology compatibility issues. The smart meters are going to cost UK consumers roughly $300 apiece spread out over several years. But the savings that come from smart home tech are far from assured.

Smart home equipment does not come cheap. Most smart home devices cost several hundred dollars bringing the cost of a complete home upgrade to thousands. Yet smart home companies cite an average saving up about 10% or roughly $100 per year for the average household. Even the least financially savvy consumers are likely to balk at the idea of spending $5,000 to upgrade their home with technology that will save them $100 a year for the life of that technology. Part of the selling point for this technology may be consumers wanting to help with climate change issues, but saving money alone is unlikely to drive the technology forward.

Perhaps the best evidence for how shaky the case is for smart home tech is not who is talking about it, but who is not talking about it. The US Department of Energy under the current administration has made repeated appeals to consumers to upgrade the energy efficiency of their home. But while solar panels, weatherization, and high efficiency appliances all get prominent mentions by the DOE, smart home technology is not a major talking point on that agency’s website.

Instead the DOE’s focus seems to be on the so-called “smart grid” which revolves around improving automation in the infrastructure that delivers energy to consumers. That implies that the government thinks this area is where the biggest savings and energy efficiency improvements can be achieved. Of course smart meters would fall into the smart grid category. And as the British are discovering, new technology does not always live up to the hype. And if the reality is disappointing for the most promising technologies like smart meters in the smart gird, then how likely are other smart technologies to live up to their own hype?

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Thu, 04/16/2015 – 11:48 | 5998925 LawsofPhysics
LawsofPhysics's picture

Get the fuck off the grid, then you might save something.  Otherwise accept your place as a cog in the machine.

Thu, 04/16/2015 – 11:50 | 5998936 RU-GAY2
RU-GAY2's picture

“smart technology” == digital slavery

Thu, 04/16/2015 – 11:56 | 5998953 insanelysane
insanelysane's picture

A few years ago I went to a local natural gas utility rate hearing.  Started asking questions and it turns out that these public utilities are guaranteed a return on their investments.  If everyone super insulated their homes and reduced their usage of gas, the price would rise because the utility is guaranteed x amount of money.  So even though demand goes down, supply would be constant, the price increases.  Anything spent on the super insulation, new windows, smart thermostats, etc is rewarded with the same fuel bill with less usage.

Thu, 04/16/2015 – 12:06 | 5999008 Bunga Bunga
Bunga Bunga's picture

Get off the grid.

Thu, 04/16/2015 – 12:26 | 5999102 Stackers
Stackers's picture

I sat down and did the math once.

It cost about $5/yr to run a 100w regular light bulb, $2/yr for a CFL and $1/yr for a LED

The regular bulb cost $2, the CFL $8 and LED $20+

Breakeven time frame for the bulb is 2-3 years for a CFL and 4-5 years for the LED

That’s just to be at breakeven for total out of pocket cost. It takes you another 2-5 years to “save” all of $5-10 in electricity cost

Thu, 04/16/2015 – 12:39 | 5999163 Urban Redneck
Urban Redneck's picture

But your math only holds as long as the US MIC is able to enforce PetroDollar supremacy, and you happily buy cheap energy from da man…

Produce your own electricty off grid and each kwh saved NOW is much moar valuable (both in terms of OpEx and CapEx)…

Thu, 04/16/2015 – 13:49 | 5999512 General Decline
General Decline's picture

Fuck the smart home gadget bullshit. Put your money in insulation and windows and turn the lights off when you leave the fucking room. Idiots.

Wow. That was kind of an unnecessarily angry post. Sorry guys.

Thu, 04/16/2015 – 14:07 | 5999568 knukles
knukles's picture

Doesn’t getting “off the grid” include being online with respect to “them folks” looking over your shoulders?
Least that’s where some of our Progressive folks go.  But then again…

Oh yes, I fully understand the getting off the grid for energy savings, conservation efforts and power usage.
Just don’t confuse privacy with the grid
BTW, if you do a bit of a search there was recently a paper published (by mistake I think) outlining the protocols and procedures of “them” using the “grid” (As in electrical wires, power to and inside your house) to read everything you do online.
Many thanks, Conspiracy Theory to Fact, again.  (Mere Van Eck Phreaking, kiddies)
As I said many times, a mere problem of signal to noise ratios…..

Thu, 04/16/2015 – 14:45 | 5999757 Vullsain
Vullsain's picture

But the smart home advertisements are so damn sophisticated bourgeois sexy !! A refrigerator that can keep track of the food (not that you would use it) the ability to show off that you can control lighting, temp etc.  from the smart phone that you also don’t need.

Thu, 04/16/2015 – 12:41 | 5999169 Mercury
Mercury's picture

A much better ROI for government, greens and utilities would be to rig up residences with a separate, low-voltage power supply (like 12V) alongside the 220V. Things like LEDs, device chargers and many appliances run much more efficiently if they don’t have to step doen the voltage.

Coersion is so much easier though.

Thu, 04/16/2015 – 19:12 | 6000792 AGuy
AGuy's picture

“greens and utilities would be to rig up residences with a separate, low-voltage power supply (like 12V) alongside the 220V. Things like LEDs, device chargers and many appliances run much more efficiently if they don’t have to step doen the voltage.”

Not really. You haven’t thought this out.

1. To provide 12V, the Pole transformer would still need to step down the voltage, thus there is still step down losses, your just switching who eats the cost. The Utiltities already eat the bulk of voltage converson losses by stepping down street pole voltages (4.2Kv to 22Kv) to residential voltages.

2. To provide power for 12V devices you would need to run seperate wiring (more $$$) and need heavier gauge wire to power low voltage devices (also more $$$) It cheaper to pull 100W at 220V than it is at 12V. P/V = I. 1/20 of the voltage = 20 times the current Ploss = RI^2

3. Switchmode power supplies are very efficient. Some has high as 98%, most modern Swithmode power supplies are  about 95% efficient.

4. Manufacters would have to design, manufacture and ship devices that run on both AC and Low voltage DC instead of just universal AC.

5. Small devices such ascell phones are virtually irrelevent since they don’t need a lot of power. The slight loss in voltage conversion is peanuts. Its the big stuff that costs (HVAC, Applicance with motors) that need higher voltages to operate and consume the bulk of the household electric demand.

Thu, 04/16/2015 – 12:40 | 5999173 Mercury
Mercury's picture

<dupe print>

Thu, 04/16/2015 – 13:41 | 5999467 RafterManFMJ
RafterManFMJ's picture

Re-run your numbers today.

I swapped out about half my lighting for LED; LED bulbs are much cheaper now than when you ran your numbers.

Likely more efficient as well.

Thu, 04/16/2015 – 15:56 | 6000053 FringeImaginigs
FringeImaginigs's picture

Bunga Bunga and back to the Jungla.  To get off the grid.  That’s a funny one. Spend $20,000 to save $1000. It’s got a worse payback than an LED bulb.  Let’s turn the lights on please., Bunga.

Thu, 04/16/2015 – 18:13 | 6000561 Kirk2NCC1701
Kirk2NCC1701's picture

Get off the Grid? Easier said than done. E.g., Good Luck in finding a woman who’s happy off the grid. And lotsa luck finding one that’s also “easy on the eyes”.

The biggest reason men are not ruled by their Big Head, is because of the Little Head. Women know it, and TPTB know it.

And in case some of you missed it, I didn’t say it couldn’t be done, but merely that the odds are not in your favor at all.

Thu, 04/16/2015 – 12:06 | 5999011 gladih8r
gladih8r's picture

That’s the part that most of these morons don’t get.  You reduce demand through conservation/efficiencies and the price gradually goes up to reflect your ability to pay for more expensive utilities.  The .gov crowd is not missing out on the party either through taxes levied on these services/products.

Utility suppliers sell the same amount of product but for a higher price i.e at higher margins.  The same logic applies to electricity, gas, fuel etc.  The question only becomes how high to crank up the prices before the public begins to complain and then back off a tiny bit.

Any discussion about ‘competitive markets’ etc, should be just flushed down a toilet. There is obvious covert and covert collusion and price fixing in all markets.  We’ve all seen it across the board.

Thu, 04/16/2015 – 15:06 | 5999859 Slarti Bartfast
Slarti Bartfast's picture

You are correct. The utilities will also want a slice of your savings pie.

Thu, 04/16/2015 – 12:28 | 5999115 FrankieGoesToHo…
FrankieGoesToHollywood's picture

In the summer in Houston, I receive a $18 gas bill: $16 in account maintance fees.  $1.75 in tax and $.25 in gas usage.

Thu, 04/16/2015 – 12:42 | 5999182 NotApplicable
NotApplicable's picture

Can you get it shut off in the summer, or are the disconnect/reconnect fees even higher?

Thu, 04/16/2015 – 13:18 | 5999345 Creepy A. Cracker
Creepy A. Cracker's picture

Yeah, one of my apartments at the beach is rarely used so has electricity usage of around $1.50/month.  Then there is the “account maintenance fee” of $11.50/month as if their computer system has to use $11.50 worth of energy to go read my digital, automatically read, meter.  Being a utility company is where it’s at – charge whatever you want and it has to be paid.

Thu, 04/16/2015 – 12:08 | 5999014 KnuckleDragger-X
KnuckleDragger-X's picture

Any technology=magic. I’ve been a gearhead all my life and have an electrical engineer/computer science degree for decades and yet I have people with liberal arts degree that can barely pass a remedial basic science course telling me I don’t understand technology and don’t know what I’m talking about. I don’t have a “smart” anything because I am smart all by my frigging self and when all these geniuses are freezing in the dark, I’ll be giggling, living a simple life and shooting them as they cross the property line…..

Thu, 04/16/2015 – 12:34 | 5999137 ForWhomTheTollBuilds
ForWhomTheTollBuilds's picture

The other thing is the security implications of all of these devices that connect your thermostat and garage door opener to the internet.

How people still don’t understand that the internet is an asshole is beyond me.

Thu, 04/16/2015 – 12:36 | 5999149 WillyGroper
WillyGroper's picture

@KDX- I’ve been a gearhead all my life and have an electrical engineer/computer science degree for decades

How can I filter the hi-freq riding on my romex from a smart meter they will not remove?

Is there a ferrite type donut I can wrap around the romex at the breaker panel?

Thu, 04/16/2015 – 12:53 | 5999232 KnuckleDragger-X
KnuckleDragger-X's picture

You would have to use rf chokes coming off of your breakers since the wire coming through the meter is too heavy to wind in an inductor. You might be able to find an industrial choke that can handle 100+ amps but I do computers and networking and don’t have the catalogs for anything that big. Any time I need anything that big it’s specced into the service wiring at the tranformers long before I ever get involved.

Thu, 04/16/2015 – 13:16 | 5999331 TBT or not TBT
TBT or not TBT's picture

He might want to back away from his keyboard, wireless mouse, and quad core 2GHz radiator too.  If thats really a concern.

Thu, 04/16/2015 – 16:16 | 6000121 WillyGroper
WillyGroper's picture

no wireless.

if you’re referring to applebaum’s discovery, power is measured in watts not frequency.

if you really want to know…

Fri, 04/17/2015 – 00:49 | 6001502 TBT or not TBT
TBT or not TBT's picture

I did mean GHz where I wrote GHz.   Digital systems radiate.  Accelerating electrical charges and all that.

Fri, 04/17/2015 – 10:07 | 6002766 WillyGroper
WillyGroper's picture

Heat is generated by power, not frequency as you radiator reference.

Frequency is a time measurement.

Thu, 04/16/2015 – 13:05 | 5999275 freedogger
freedogger's picture

Amen KnuckleDragger-X.

My idea of a smart home is clamping a device on each of my main wires going out of my panel and seeing where the draw is. I’ve turned off a few useless things this way. I do it for a few days on each wire. Halfway through. Once that is done, I will then be finished. If I notice the bill spike, I’ll do it again.

Thu, 04/16/2015 – 12:12 | 5999029 raywolf
raywolf's picture

yes, sounds like another way to monitor your activity… once google buys a smart meter company your TV will come on automatically and offer you discounts on cheap roasts, when you switch on the oven..

Thu, 04/16/2015 – 12:18 | 5999055 konputa
konputa's picture

And if the reality is disappointing for the most promising technologies like smart meters in the smart gird”

That’s an appropriate freudian slip.

Thu, 04/16/2015 – 18:23 | 6000594 Kirk2NCC1701
Kirk2NCC1701's picture

“Smart” is relative, situational-dependant, and an over-used Buzzword, concocted by PR consultants.

The best ‘smart’ things are the simple solutions, low tech or common-sense solutions.

It begins with choosing a suitable location (geographic region in the country, with Temperate climate and adequate water), size, location in city/town or its proximity to city/town.

The next steps are the position and orientation of the house on the property; its design, use of materials and construction. Using quality materials, workmanship, top-notch insulation & natural lighting…

Wise HVAC systems, with backup from secondary energy source (Sunlight, Wood, Wind, Coal). Energy-efficient appliance, LED lamps…

All these things do not need a hi-tech solution (expensive solar panels), to save you a bundle.

Thu, 04/16/2015 – 12:09 | 5999021 Freedom In Your…
Freedom In Your Lifetime's picture

What he said…

The way forward is not becoming more dependent on the latest technology that requires overpriced specialty contractors to install.

You want housing to be affordable? Build somewhere where the building department isn’t fascist control freaks. Build with Cob or something similar to the earthships or something else you where you and your friends / family can do most of the work. Save money on your heating and cooling by building something that doesn’t require HVAC 90% of the year. Use the money you save on the envelope (because you did the whole fucking thing yourself with material from your own property) and buy a good solar or wind system with a large battery back up.

You’re now not even connected to the grid and you end up paying 50% less than the normal $/sf while getting infiniitely better end product. A true smart home doesn’t require thousands of dollars in meters and control panels to be efficient and low maintenance.

Thu, 04/16/2015 – 12:49 | 5999212 NotApplicable
NotApplicable's picture

Funny how so many people fail not only to account for total EROI for all of the inputs to create smart systems, but also the ever increasing expense that entropy dictates in order to maintain them.

Neither of which is that damn hard.

But, when the world’s run by the mafia and their sophist minions, a century of government skooling makes all that shit just fade to the background, while wishful-thinking pervades pretty much everywhere.

Thu, 04/16/2015 – 12:56 | 5999245 Freedom In Your…
Freedom In Your Lifetime's picture

No kidding. Low cost / low tech building methods have been around forever. I was ‘educated’ in archtiecture, have been working in the architecture field for the past 12 years, and only through independent education and curiosity have I come across anything truly interesting and helpful.

It’s a wonder you’re even still allowed to build a home in this country without a proper contractors license, bank approved mortgage, and set of plans stating every aspect of your house was designed to continue supporting the current unsustainable paradigm.

Thu, 04/16/2015 – 13:46 | 5999495 RafterManFMJ
RafterManFMJ's picture

Heh, my house doesn’t have AC.

Why? Well, it was properly sited and properly built … back in 1910.

Thu, 04/16/2015 – 12:17 | 5999048 Exit through th…
Exit through the gift store's picture

Going off grid is really the only way. I went off grid with a system that cost $3800, 750 watts of solar, 1800 ah battery bank. I use a wood stove for heat. I havent paid a utility bill in almost 2 years. Tax credit paid for 1/3rd of the cost. The trick is that it is easier to kill a watt than make a watt. So when we are not home everything but our refrigerator is turned off. The biggest drain on power is the cable box, it uses more than your refrigerator. Also your Ice maker is pulling more energy than your refrigerator.

Thu, 04/16/2015 – 13:29 | 5999403 TBT or not TBT
TBT or not TBT's picture

Yep.   Every cable or satellite box I have metered with a Kill-A-Watt uses about the same amount of power whether ON or “OFF”    if you replace your comcast box with a SiliconDust cable modem and a recent notebook computer or dinky media PC you can save 25 to 30W, 24/7.   At 35c/kWh, the marginal price of electricity from PG and E, that adds up.  1000 hours is about 6 weeks from memory, so the damn things eat 30kWh in 6 weeks.   $8 or $9 bucks if my math isnt wrong.

Thu, 04/16/2015 – 14:31 | 5999683 JuliaS
JuliaS's picture

I lived for years with the fridge unplugged. Anything requiring refrigeration I bought fresh and ate it before it had a chance to spoil. The majority of foods – non-perishables. Instead of heating the whole house I had a heated waterbed, well insulated, consuming 10-30W of electricity (half a light bulb worth). Computer was my biggest power drain. Nowdays it’s possible to live consuming virtually no electricity, if you cook with gas.

The biggest problems with going solar are having a place to put the panels. Not everyone has a house with a nicely light roof. The 2nd obstacle is the myraid of prohibitive regulations. It might seem initially like the government encourages you to go green, until you start digging through papers.

I’m all for going off the grid. If you can do it – do it. The conversion will pay for itself in about 5 years. I had a summer house next to a stream long time ago. There I was allowed to tap into that power. I made a primitive watermill and hooked it to a beefy alternator from a burned out car. Ran the tv, the cooler and the electric kettle with it. Since water was running 24/7, didn’t even need a battery bank.

Fri, 04/17/2015 – 01:31 | 6001926 layman_please
layman_please's picture

careful with the electric blankets/beds. epidemiological studies show increased cancer risk from those things when close to ones body.

Thu, 04/16/2015 – 12:22 | 5999082 BullyBearish
BullyBearish's picture

Distrust All Digital

Thu, 04/16/2015 – 14:16 | 5999619 JuliaS
JuliaS's picture

I am on the board of directors in a housing complex. We have a 25 year old gas furnace – nice and robust. Runs like a clock. The financial institution handing our finances is pressuring us to update to a smart furnace. Supposedly it’ll save us money on gas bills. Then we talked to a contractor handing repairs and he tells us to stay the hell away from smart tech. He says all the new furnaces are built like shit and since they’re full of electronics, they break constantly and you have to service them for a lot of money. Old furnace – you can take a chunk of material, carve it into shape in your metal shop and make spare part for nothing. 25 year old furnace will probably last another 75. It looks rusty, but who gives a damn about cosmetics. It’s locked in the basement. Forget savings. You’ll loose your shirt chasing pennies. Stick to what lasts and don’t fix something if it ain’t broken.

Thu, 04/16/2015 – 14:44 | 5999753 robertsgt40
robertsgt40's picture

Im a little more cynical. I can see our utilities being throttled or shut down for using too much juice or water.

Thu, 04/16/2015 – 16:21 | 6000152 WillyGroper
WillyGroper's picture

that’s the plan.

Thu, 04/16/2015 – 11:49 | 5998926 Big Corked Boots
Big Corked Boots's picture

Smart homes consume thousands of dollars of initial capital, and enable corporations to manage their profitability at your expense. They also enable the goverment to hijack your home and run your utilities for you. For your own good, and the children, of course. Like so many things, a good idea has been turned into shit by the PTB.

Thu, 04/16/2015 – 11:54 | 5998943 nuubee
nuubee's picture

With our current mount everest-sized body of laws, technology simply makes it easier to enforce every single one of them.

The question becomes, will technology be wrested from the control of the elites and put into private capitalist use, or will we devolve to something truly like 1984.

Thu, 04/16/2015 – 11:59 | 5998967 insanelysane
insanelysane's picture

In Greece the government wanted to collect taxes via the utility companies but the utility companies revolted.  From what the US has experienced with all of the communication companies lining up to help the NSA, US .gov should have no trouble collecting taxes via utility companies if they so choose.

Thu, 04/16/2015 – 12:17 | 5999044 Bunga Bunga
Bunga Bunga's picture

In Greece property tax is paid with the utility bill. If you can’t pay, they cut you off.

Thu, 04/16/2015 – 12:19 | 5999056 Urban Redneck
Urban Redneck's picture

Smart homes actually consume tens of thousands of dollars of additional initial capital, but they don’t include any of the “dumbass sheeple monitoring meters” that these snakeoil salesmen push.

On a related note – apparently HELL HAS FROZEN OVER – since the DoE has apparently taken an intelligent approach to something it is (unfortunately) responsible for, but I’m sure Satan will have his little buddy Obozo correct this problem in short order…

Thu, 04/16/2015 – 12:28 | 5999060 WillyGroper
WillyGroper's picture

If the author is going to write about it he should have a better grasp.

Nest (unless fixed) screws up & has to be manually rebooted if it loses power.

They’re putting smart meters on everything. It turns your romex into an antenna & cooks your ass with EMF that no Rottenfellar Dr. can diagnose with the host of maladies they inflict. Speaking from a very expensive experience here!

Technocracy is here and between the EMF & Chemtrails ( we are being biologically reengineered down to our DNA…See Time mag. The man made EMF is bouncing off the ionosphere causing incalcuable damage. Couple that with the cordless phones, wifi, bluetooth, cell phones/towers, you really have to take a gander at what the EMF does to your blood by standing in front of a smart meter for less than a minute.

These things were not installed for any grid management. They are for snooping & electronic warfare. You can read Lilly Wave into that, not to mention if/when TSHTF they will remotely whack every utility you have & use the weapon they’ve created. See Kay Griggs.

As usual, just like the body snatchers, the matrix, and hunger games, hollyweird gives us a glimpse into our future. No human reproduction.

APS smart-meter fees rescinded

APS smart-meter fees rescinded