Smart Thermostat Savings: What You Can Really Expect

By Home Energy Guide Hub Editorial Team Updated October 18, 2026 Reviewed October 18, 2026 9 min read

Short answer

An ENERGY STAR certified smart thermostat saves about 8% on heating and cooling bills, or roughly $50 a year for an average household, according to EPA. Homes that sit empty much of the day or have high heating and cooling costs can save about $100 a year. Savings come from setbacks, so settings matter more than the device.

Key takeaways

ENERGY STAR puts average smart thermostat savings at about 8% of heating and cooling bills, or about $50 a year.
Homes with high heating and cooling bills, or that are empty for long stretches, can save around $100 a year, per ENERGY STAR.
DOE says setting your thermostat back 7°F to 10°F for 8 hours a day can save as much as 10% a year on heating and cooling.
Heat pump owners need a thermostat built for heat pumps, because a poorly handled setback can switch on costly backup electric-resistance heat.
Many smart thermostats need steady power, often from a common wire (C-wire), so check your wiring before you buy.
ENERGY STAR certified smart thermostats must be able to join utility demand-response programs, and you can always override an event.

Illustrative image, not a specific product or home.

Smart thermostat savings are real, but they are modest and they depend on how you set the device up. EPA’s ENERGY STAR program puts the average at about 8% of heating and cooling costs, which works out to roughly $50 a year. This guide explains where that number comes from, which settings earn the savings, and what heat pump owners and people without a C-wire need to know before buying.

How much does a smart thermostat actually save?

On average, an ENERGY STAR certified smart thermostat saves about 8% on heating and cooling bills, or about $50 a year, according to EPA. Homes with high heating and cooling bills, or homes that are empty for long parts of the day, can save about $100 a year. Mild-climate homes and homes that are always occupied save less.

Average yearly savings from an ENERGY STAR smart thermostatHomes with high heating and cooling bills, or that sit empty for long stretches, can save about twice the average.

Source: ENERGY STAR (U.S. EPA), Smart Thermostats (as of October 2026).

View data as table

Household	Estimated savings per year
Average home	$50/yr
High bills or empty all day	$100/yr

Those figures come from real homes, not lab tests. To earn the label, a thermostat maker must show savings using field data from more than one thousand homes over a full year. The ENERGY STAR criteria require a heating run-time reduction of at least 8% and a cooling run-time reduction of at least 10%, measured at the lower 95% confidence limit. That is a conservative bar, so a typical certified product should do at least that well.

Heating and cooling are the biggest energy users in most homes. The U.S. Energy Information Administration (EIA) found that space heating and cooling made up 52% of household energy use (EIA, Residential Energy Consumption Survey data for 2020). ENERGY STAR puts heating and cooling at almost half of the average household’s annual energy bill, or more than $900 a year. A small percentage of a big number still adds up.

Heating and cooling's share of home energy useSpace heating and cooling are just over half of household energy use, which is why a small percentage saving still adds up.

Source: U.S. EIA, Residential Energy Consumption Survey 2020 (as of December 18, 2023).

View data as table

End use	Share of household energy use
Space heating and cooling	52%
Everything else	48%

Who saves the most

Your situation	What to expect	Why
Home empty most weekdays	Higher end, about $100 a year (ENERGY STAR)	Long daily setbacks while no one is home
Cold winters or hot summers	Above average	More heating and cooling hours to trim
Mild climate	Below average	Smaller heating and cooling bills to begin with
Someone home all day	Below average	Fewer hours for a safe setback
Already using a well-set programmable thermostat	Small extra savings	You are already doing most of the work
Heat pump with backup strips, poorly set up	Savings can vanish	Recovery can trigger costly resistance heat

Where do the savings come from?

The savings come almost entirely from setbacks: running the heat less while you sleep or are out, and running the air conditioning less when no one needs it. A smart thermostat does not make your furnace or heat pump more efficient. It makes it easier to stick with a good schedule.

The U.S. Department of Energy (DOE) says you can save as much as 10% a year on heating and cooling by turning your thermostat back 7°F to 10°F for 8 hours a day from its normal setting. A smart thermostat helps you get there in a few ways:

Schedules and learning. Some models learn when you are asleep or away and build a schedule for you.
Geofencing. The thermostat uses your phone’s location to notice when everyone has left and when someone is heading home.
Remote control. You can turn the heat down from your phone if you forgot before a trip.
Run-time reports. Certified models must report how long your system runs, such as monthly run time, and give feedback on how your settings affect energy use.

A cheaper programmable thermostat can deliver similar savings if you program it and leave it alone. DOE notes that programmable thermostats cost less but usually lack the interactive features. The honest trade-off is convenience versus price.

What settings save the most energy?

The biggest savings come from a steady overnight and away setback of 7°F to 10°F, a modest comfort setting while you are home, and leaving the fan on Auto. Avoid constant manual overrides and “hold” modes that cancel your schedule for days.

Here is a simple setup plan:

Pick your home-and-awake temperatures. In winter, choose the lowest setting that feels comfortable. In summer, choose the highest. DOE’s Energy Saver guide suggests setting summer temperatures as high as is comfortable when you are home and awake.
Set an overnight setback. Lower the heat (or raise the cooling setting) for the hours you sleep.
Set an away setback. If the home is empty for 8 hours or more on weekdays, add a second setback for that block.
Turn on geofencing if you have irregular hours. It catches the days your schedule changes.
Leave the fan on Auto. DOE recommends Auto unless an indoor air quality professional set your system to run the fan continuously.
Use “eco” or energy-saving modes. Many models suggest small changes based on your history. Accept the ones you can live with.
Review the monthly report. If run time jumps with no change in weather, something may be wrong, such as a dirty filter.

Does warming the house back up erase the savings?

No. A cooler house loses heat more slowly, so the energy you save during a setback is generally more than the energy it takes to warm back up. The one big exception is a heat pump with electric-resistance backup heat, covered next.

Do smart thermostats work with heat pumps?

Yes, but you need a model and settings designed for heat pumps. DOE warns that if you set back a heat pump manually and that causes backup electric-resistance heat to switch on, you can lose your savings, because that backup heat costs much more to run. Use a smart or programmable thermostat with functions suitable for a heat pump.

Most ducted heat pumps have electric-resistance “strips” as auxiliary heat. When you ask for a big temperature jump on a cold morning, a basic thermostat may call for those strips to close the gap fast. A heat-pump-aware thermostat recovers more slowly, starting earlier so the heat pump can do the job alone.

ENERGY STAR takes this seriously enough that certified thermostats must report how much resistance heat heat pump homes use at different outdoor temperatures. ENERGY STAR also notes that homes with variable-capacity (not single-speed) heat pumps or air conditioners will generally perform best with the thermostat the equipment maker recommends, whether or not that model is certified.

Settings to ask your installer about:

Auxiliary heat lockout. This keeps backup strips off above an outdoor temperature you choose, so they run only when it is truly cold.
Compressor lockout. Used mainly on dual-fuel systems (heat pump plus gas furnace) to decide when the furnace takes over.
Smart recovery or adaptive recovery. This starts warming early and slowly instead of late and fast.
Smaller setbacks. On very cold nights, a setback of just a few degrees may be a better fit than 7°F to 10°F. Watch your aux heat run time and adjust.

If you are thinking about a new system, our heat pump cost and savings guide explains sizing and efficiency ratings, and our guide to heat pumps in cold climates covers backup heat and defrost in more detail.

Will a smart thermostat work with my wiring?

Most smart thermostats work with common low-voltage (24-volt) furnaces, air conditioners and heat pumps. Many need steady power through a common wire, called a C-wire. Line-voltage systems, such as many electric baseboard heaters, need a thermostat made specifically for line voltage.

Before you buy:

Turn off power to the furnace or air handler at its switch or breaker.
Remove the old thermostat’s face and look at the labeled terminals. Take a clear photo.
Look for a wire on the “C” terminal. If there is one, you likely have steady power. If not, the thermostat may need a power adapter, batteries, or a new wire run by a technician.
Check the letters. “O” or “B” usually means a heat pump reversing valve. “W2” or “AUX” often means backup heat. Thick wires, or a thermostat marked for line voltage, mean a high-voltage system: stop and call a pro.
Run the maker’s online compatibility check using your photo, before opening the box.

ENERGY STAR also advises checking compatibility with your heating and cooling system and keeping Wi-Fi thermostats close to your router, or using a range extender. A certified thermostat must keep working as a basic thermostat if the internet drops.

How do utility demand-response programs work?

Demand-response programs pay you to let your utility adjust your thermostat by a few degrees during a limited number of peak hours, usually on the hottest or coldest days. ENERGY STAR certified smart thermostats must be able to work with these programs, and you must keep the ability to override any event.

Typical rewards include a rebate on the thermostat, a sign-up credit and seasonal bill credits. Programs differ widely. Some pre-cool or pre-heat your home before an event so you barely notice. Others ask you to accept a set number of events each season.

To find what your area offers:

Search the ENERGY STAR Rebate Finder by ZIP code for thermostat rebates.
Check your electric utility’s website for “smart thermostat,” “demand response” or “peak savings” programs.
If your utility uses time-of-use rates, ask whether your thermostat can follow price signals automatically.

Is a smart thermostat worth it for you?

A smart thermostat is usually worth it if your home is empty for long stretches, your heating and cooling bills are high, or you have struggled to keep a programmable thermostat set correctly. If you already use steady setbacks and someone is home all day, the extra savings will be small.

A quick way to judge it: look at your past year of bills and estimate what you spend on heating and cooling. Multiply that by 8% for a rough average savings figure, then compare it with the price of the thermostat after any utility rebate. Remember that ENERGY STAR’s numbers are national averages and EPA itself cautions against applying them directly to any one home or region.

8%Average heating and cooling savingsAbout $50 a year (ENERGY STAR)

$100/yrPossible in high-bill or often-empty homesENERGY STAR estimate

Up to 10%Yearly savings from a 7–10°F setbackFor 8 hours a day (DOE)

$900+Typical yearly heating and cooling spendAlmost half the energy bill (ENERGY STAR)

Source: ENERGY STAR Smart Thermostats; U.S. DOE Energy Saver (as of October 2026).

Other places your heating and cooling money goes

A thermostat cannot fix a leaky, under-insulated house. If rooms are drafty or your system runs constantly, start with a professional home energy audit to find where heat is escaping. Sealing the gaps with our air sealing guide often makes every degree on the thermostat go further.

Bottom line

An ENERGY STAR certified smart thermostat saves about 8% on heating and cooling, or roughly $50 a year on average, and more if your home sits empty during the day. The device only saves money if you use setbacks, leave the fan on Auto, and avoid overriding your schedule. Heat pump owners should choose a heat-pump-aware model and ask about auxiliary heat lockout. Check your wiring for a C-wire before you buy, and look for a utility rebate or demand-response program to cut the cost.

Energy jargon decoder

Look up a term

22 terms

AFUE
Annual Fuel Utilization Efficiency: the share of a furnace's or boiler's fuel that becomes heat over a year. A 95% AFUE furnace turns 95 cents of every fuel dollar into heat.
Air sealing
Closing gaps and cracks that let outside air leak in and conditioned air leak out, usually with caulk, foam and weatherstripping. Usually done before adding insulation.
AMI
Area Median Income: the middle household income for your area. Many rebate programs set income limits as a percentage of AMI, such as 80% or 150%.
Blower door test
A test where a fan in a doorway depressurizes the house so an auditor can measure and find air leaks.
BTU
British thermal unit: the heat needed to warm one pound of water by 1°F. Heating and cooling equipment is sized in BTU per hour.
COP
Coefficient of performance: units of heat delivered per unit of electricity used. A COP of 3 means three times as much heat as electric resistance.
Degree days (HDD)
Heating degree days add up how far each day's average temperature falls below 65°F. More degree days means more heating needed.
Energy burden
The share of household income spent on home energy bills. Above about 6% is commonly called high.
Heat pump
An electric system that moves heat instead of making it: out of the house in summer and into the house in winter.
HEEHR / HEAR
High-Efficiency Electric Home Rebate program, a state-run federal rebate capped at $14,000 per household for low- and moderate-income homes. Only live in some states.
HOMES
Home Owner Managing Energy Savings rebates: state-run, whole-home rebates paid for measured or modeled energy savings, up to $8,000 federally.
HSPF2
Heating Seasonal Performance Factor (2023 test): a heat pump's heating efficiency in BTU per watt-hour. ENERGY STAR split systems need 7.8 or more.
kWh
Kilowatt-hour: the unit on your electric bill. A 1,000-watt appliance running for one hour uses 1 kWh.
LIHEAP
Low Income Home Energy Assistance Program: federal money, run by states and local agencies, that helps eligible households pay heating and cooling bills.
Manual J
The industry standard load calculation for sizing heating and cooling equipment room by room. Ask contractors whether they did one.
R-value
How well insulation resists heat flow. Higher is better. Attics in most of the US should reach R-49 to R-60.
SEER2
Seasonal Energy Efficiency Ratio (2023 test): cooling efficiency of an air conditioner or heat pump. Higher means less electricity for the same cooling.
SHGC
Solar Heat Gain Coefficient: how much of the sun's heat a window lets in, from 0 to 1. Lower is better in hot climates.
Therm
A unit of natural gas energy equal to 100,000 BTU. Many gas bills charge per therm.
U-factor
How fast a window or door loses heat. Lower is better. Find it on the NFRC label.
UEF
Uniform Energy Factor: a water heater's efficiency rating. Gas tanks are around 0.6–0.7; heat pump water heaters are often 3 or higher.
Weatherization (WAP)
The federal Weatherization Assistance Program provides free energy upgrades for income-eligible households, generally up to 200% of the poverty guidelines.

Questions people ask

Is a smart thermostat worth it if someone is home all day?

It can still help, but expect smaller savings. ENERGY STAR notes that homes that are always occupied see less savings, because there are fewer hours when the thermostat can safely set the temperature back. You can still save by lowering the heat a few degrees overnight, by using an energy-saving schedule, and by joining a utility program that pays for small adjustments on peak days. If your system runs a lot and your bills are high, the run-time reports can also point to problems such as a clogged filter or leaky ducts.

Do I need a C-wire for a smart thermostat?

Many smart thermostats need one, but not all. The common wire, or C-wire, gives the thermostat steady 24-volt power for its screen and Wi-Fi. Some models run on batteries or use a power adapter kit when no C-wire exists. Before buying, turn off power to the system, remove the old thermostat face, and note which terminals have wires. Check the product's compatibility checker against your wiring, or have an HVAC technician add a wire if needed.

What temperature should I set my smart thermostat to in winter?

Set it as low as is comfortable while you are home and awake, then let it set back 7°F to 10°F while you sleep or are away. DOE says that setback, held for about 8 hours a day, can cut heating and cooling costs by as much as 10% a year. Keep the home warm enough for older adults, babies, anyone with health conditions and pets. If you have a heat pump, use smaller setbacks or a heat-pump-aware schedule so backup heat does not kick in.

Will turning the heat back up in the morning cancel out my savings?

No. This is a common myth. A house loses heat more slowly when it is cooler inside, so letting it cool down for several hours means less total heat loss. The energy needed to warm back up is generally less than what you saved during the setback. The main exception is a heat pump with electric-resistance backup heat, where a fast recovery can trigger the expensive backup strips. A thermostat designed for heat pumps manages recovery more gradually.

What does it mean when my thermostat says 'aux heat' or 'emergency heat'?

Auxiliary heat is backup heat, usually electric-resistance strips inside the air handler of a heat pump system. It comes on when the heat pump cannot keep up, during defrost cycles, or when you ask for a big jump in temperature. Emergency heat is a manual setting that runs only the backup heat. Both cost much more to run than the heat pump itself. If aux heat runs often in mild weather, ask an HVAC technician to check your thermostat settings and system.

How do utility smart thermostat programs work?

You let your utility nudge your thermostat a few degrees during a limited number of high-demand hours, usually on very hot or very cold days. In return, many utilities offer a sign-up credit, a rebate on the thermostat, or bill credits per season. ENERGY STAR certified smart thermostats must be able to work with these programs, and you keep the right to override any event. Rules and payments vary, so read your utility's program terms before enrolling.

Should I set my thermostat fan to 'On' or 'Auto'?

For most homes, choose Auto. DOE's Energy Saver guide recommends setting the fan switch to Auto unless an indoor air quality professional has set your system to run the fan continuously for health reasons. With the fan on all the time, the blower motor uses extra electricity, and in summer it can blow moisture from the cooling coil back into the house, which makes rooms feel clammy.

Can I install a smart thermostat myself?

Many homeowners do, if the system uses standard low-voltage wiring. Turn off power to the furnace or air handler at the switch or breaker, label each wire before you remove the old thermostat, and follow the install guide. Do not try a do-it-yourself swap on line-voltage thermostats (common with electric baseboard heaters), which carry household voltage. If you have a heat pump, a dual-fuel system or no C-wire, a professional install avoids setup mistakes.

Does a smart thermostat work during a Wi-Fi outage?

Yes, a certified one keeps running. ENERGY STAR criteria require that a certified smart thermostat still works as a basic thermostat without a connection to its service provider. Your schedule and temperature control continue, though you lose remote control from your phone, geofencing and utility events until the internet comes back. Keep your thermostat within good Wi-Fi range of your router, or add a range extender, to avoid frequent dropouts.

Sources

Smart Thermostats — ENERGY STAR (U.S. EPA), accessed October 18, 2026
ENERGY STAR Smart Thermostats FAQs for EEPS — ENERGY STAR (U.S. EPA), accessed October 18, 2026
Smart Thermostats Key Product Criteria — ENERGY STAR (U.S. EPA), accessed October 18, 2026
Low- to No-Cost Tips for Saving Energy at Home — ENERGY STAR (U.S. EPA), accessed October 18, 2026
Home Upgrades — U.S. Department of Energy, accessed October 18, 2026
Energy Saver Guide: Tips on Saving Money and Energy in Your Home — U.S. Department of Energy, accessed October 18, 2026
Use of Energy Explained: Energy Use in Homes — U.S. Energy Information Administration, accessed October 18, 2026
ENERGY STAR Rebate Finder — ENERGY STAR (U.S. EPA), accessed October 18, 2026

Home Energy Guide Hub Editorial Team

Written and fact-checked by our editorial team against the sources listed above. This guide is educational and is not tax, legal or financial advice.

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