Energy Savings from

Honeywell Total Connect

Comfort Thermostats October 13, 2014

Prepared for:

Smart Grid Solutions

Honeywell International Incorporated

1985 Douglas Drive North

Golden Valley, MN 55422

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Prepared by:

Bryan Ward

James Stewart, Ph.D.

Jeremy Jackson

Cadmus

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Table of Contents Executive Summary ....................................................................................................................................... 1

Introduction ............................................................................................................................................ 1

Research Methods .................................................................................................................................. 1

Main Findings ......................................................................................................................................... 2

Directions for Future Research ............................................................................................................... 3

Introduction .................................................................................................................................................. 4

Honeywell Total Connect Comfort Thermostats .................................................................................... 4

Research Questions ................................................................................................................................ 5

Energy Policy Relevance ......................................................................................................................... 6

Organization of this Report .................................................................................................................... 7

Methodology ................................................................................................................................................. 8

Overview ................................................................................................................................................. 8

Analysis Steps ......................................................................................................................................... 9

Step 1: Developing Home Space Conditioning Energy-Use Models ................................................ 9

Step 2: Matching TCC homes to RECS homes ................................................................................ 10

Step 3: Estimating Models of Home Energy Use for Heating and Cooling .................................... 12

Step 4: Determining the Effect of TCC Thermostats on Temperature Set Points.......................... 15

Step 5: Estimating Energy Savings ................................................................................................. 15

TCC Thermostat Savings Estimates ............................................................................................................. 17

Differences in Thermostat Interior Temperature Set Points ............................................................... 17

Energy and Energy Cost Savings from TCC Thermostats ...................................................................... 19

Regional Savings Estimates ............................................................................................................ 21

TCC Thermostat Cost-Effectiveness ..................................................................................................... 24

Cost of Saved Energy for Utility Connected Thermostat Efficiency Programs .............................. 25

Conclusions ................................................................................................................................................. 28

Summary of Main Findings ................................................................................................................... 28

Future Research.................................................................................................................................... 29

References .................................................................................................................................................. 30

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Executive Summary

Introduction Space conditioning constitutes the largest energy end-use in U.S. homes. According to the most recent

U.S. government estimates, space heating and cooling account for, respectively, 42% and 6% of

residential energy use. Consequently, policymakers looking to slow the increase in U.S. energy

consumption have focused on achieving efficiency improvements in residential space conditioning.

An opportunity exists to reduce residential energy use through enhancing users’ control of home

heating and cooling systems. In the past few years, Honeywell and other thermostat manufacturers

have introduced a new generation of residential space-conditioning control technologies: wireless-

communicating, programmable thermostats. Users can control these thermostats from a thermostat

keypad or a web or mobile device. The enhanced control afforded by WiFi-enabled thermostats reduces

the costs of controlling the space heating and cooling systems and creates potential for energy savings

by enabling users to better align home space conditioning with occupancy and actual demand.

This paper uses data about user interactions with Honeywell connected thermostats to better

understand the thermostats’ impacts on home energy use.

Specifically, the paper answers three main questions:

1. What energy savings for home space heating and cooling do Honeywell Total Connect Comfort

(TCC) thermostats produce?

2. What energy cost savings do TCC thermostats produce?

3. How do energy and cost savings from TCC thermostats vary between climate zones within the

United States?

This study offers an advantage in covering the entire United States and providing estimates of energy-

use savings for both heating and cooling. It does not consider, however, the potential benefits to utilities

of using Honeywell TCC thermostats to manage residential space-conditioning loads to obtain peak-

demand savings.

Research Methods To estimate energy savings, Cadmus compared average heating and cooling temperature set points in

homes with and without connected thermostats. Cadmus analyzed user-interface (UI) data from 2012

for almost 1,800 Honeywell TCC thermostats purchased through retail channels or space-conditioning

contractors. The UI data provided a rich source of information about how early adopters used

Honeywell connected thermostats.

To establish a baseline for Honeywell TCC thermostats, Cadmus used data on thermostat temperature

set points from the 2009 U.S. Department of Energy’s Residential Energy Consumption Survey (RECS).

This large, nationally-representative survey inquired about different energy-use aspects for home

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heating and cooling including typical thermostat temperature set points, occupancy schedules, heating

equipment type, and house characteristics. The RECS survey constitutes a valid baseline because it

preceded widespread introduction of connected thermostats.

To minimize the potential that selection bias could compromise the comparison of thermostat set

points, Cadmus used a matching procedure, Coarsened Exact Matching (CEM), to identify RECS

households with similar incomes, home sizes, and locations as homes with TCC thermostats. The study

analyzed matched observations of RECS and TCC thermostat homes. This matching procedure reduced

the likelihood that differences in thermostat set points between homes with and without connected

thermostats would occur due to selection bias in thermostat adoption.

Finally, Cadmus used RECS data to develop econometric models of energy use for home heating and

cooling. The models, which explain energy use as a function of thermostat settings, served to estimate

energy savings from connected thermostats.

Main Findings Overall, Cadmus’ analysis suggests Honeywell TCC thermostats purchased through retail channels or

space-conditioning contractors saved significant energy for the average adopter and adoption proved

highly cost-effective in many U.S. climate zones.

The energy savings analysis resulted in the following specific findings:

On average, Honeywell TCC thermostats would save about 5% of energy use for home space

heating and 19% of energy use for home cooling during a normal weather year. In total, TCC

thermostats would save about 7% of energy use for heating and cooling.

Honeywell TCC thermostats would save about $25 per home per year in space heating energy

costs and $91 per home per year in space cooling energy costs during a normal weather year.

The thermostats would produce total energy cost savings of $116 per home per year.

Though sample sizes are small for some climate zones, the analysis suggests energy and energy

cost savings vary significantly between zones. Savings depend on zone-specific demand for

heating or cooling and the impact of Honeywell TCC thermostats on temperature set points.

Hot-Humid and Hot-Dry/Mixed-Dry climate zones would exhibit the greatest heating energy

savings and energy cost savings during a normal weather year. Homes without connected

thermostats in these zones experienced the highest average heating temperature set points

and, therefore, present some of the greatest potential for energy savings. It is estimated TCC

thermostats would generate space-heating energy cost savings, respectively, of $70 and $39 per

home per year.

Hot-Humid and Mixed-Humid climate zones would exhibit the greatest cooling energy savings

and energy cost savings during a normal weather year. These zones include some of the most

warm and humid areas and require the greatest demand for air conditioning. It is estimated that

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Honeywell TCC thermostats would generate estimated space-cooling energy cost savings,

respectively, of $172 and $121 per home per year.

In the Hot-Humid and Mixed-Humid climate zones, annual energy cost savings of, respectively,

$242 and $135 would exceed the $100 incremental cost of a Honeywell TCC thermostat. Homes

in the Mixed-Dry/Hot-Dry and Very Cold/Cold climate zones would achieve a positive return on

their investment after between one and two years.

The average cost of saved energy for a Honeywell TCC thermostat utility direct install program

would be $0.06 per kWh, which equals the median levelized cost of saved energy ($0.06/kWh)

for utility residential whole home or direct install program in the U.S. (LBNL, 2014).

Directions for Future Research In conducting this research, Cadmus identified the following questions for future research:

This analysis pertains to very early adopters of Honeywell TCC thermostats. Will savings of

subsequent adopters be the same, lower, or higher?

Energy savings and energy cost savings estimates differ substantially between climate zones

(though based on relatively small analysis sample sizes). Do such differences between climate

zones remain among more recent adopters?

How do adopters of TCC thermostats achieve energy savings? Adopters could have saved energy

by reducing the intensity of space conditioning when operating heating or cooling systems or by

reducing the number of days or hours with the space-conditioning unit switched to on.

How persistent are energy savings from TCC thermostats? Do savings increase, decrease, or stay

the same with time since adoption?

Cadmus is performing a second national impact study to answer these questions. The study will analyze

UI data from 2013 for a very large number of homes with Honeywell TCC thermostats. Cadmus expects

to complete the study in 2014 and will update this study’s results, providing a more comprehensive set

of findings about energy savings from Honeywell connected thermostats.

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Introduction

In U.S. homes, space conditioning constitutes the largest energy end use. Per the most recent U.S.

government estimates, space heating and cooling account for, respectively, 42% and 6% of residential

energy use.1 Although space conditioning’s share of residential energy consumption will likely decrease,

energy used per home for residential space conditioning will grow due to increased saturation of central

air conditioning.

Consequently, policymakers looking to slow the increase in U.S. energy consumption have focused on

achieving efficiency improvements in residential space conditioning. Policies aimed at increasing space

heating and cooling efficiency have been effective, encouraging adoption of better insulation, double-

paned windows, and efficient furnaces, heat-pumps, and air conditioners.2 Despite these achievements,

significant opportunities remain to reduce energy use for home space conditioning.

Enhancing user control of home heating and cooling systems offers an opportunity for increasing energy

savings. In the 1990s, the U.S. government’s ENERGY STAR program encouraged adoption of

programmable thermostats, which allowed users to schedule heating and cooling in their homes; energy

savings from programmable thermostats, however, have proved elusive.3

During the past few years, Honeywell and other thermostat manufacturers have introduced a new

generation of residential space-conditioning control technologies: wireless-communicating,

programmable thermostats. Users can use these thermostats to control the heating and cooling system

from the thermostat keypad or a web or mobile device. The enhanced control afforded by WiFi-enabled

thermostats reduces control costs and creates potential for energy savings by enabling users to better

align home occupancy patterns with space heating and cooling.

Honeywell Total Connect Comfort Thermostats Honeywell introduced the first WiFi-enabled Total Connect Comfort (TCC) thermostats in 2012. A wall-

mounted communicating programmable thermostat, the TCC thermostat offers a user interface and

mobile and web applications. These applications allow users to connect to their thermostats and to

adjust settings and temperature set points remotely via phone, tablet, or computer. Figure 1 shows a

recent TCC thermostat model.

1 U.S. Department of Energy analysis of 2009 RECS. Available at

http://www.eia.gov/todayinenergy/detail.cfm?id=10271&src=%E2%80%B9%20Consumption%20%20%20%20

%20%20Residential%20Energy%20Consumption%20Survey%20%28RECS%29-f1

2 For example, see Aroonruengsawat, Auffhammer, and Sanstad (2009) and Jacobsen and Kotchen (2010).

3 The U.S. EPA suspended its ENERGY STAR programmable thermostat on December 31, 2009, after questions

arose regarding the thermostats’ net energy savings and environmental benefits. See

https://www.energystar.gov/index.cfm?c=archives.thermostats_spec and Peffer, Pritoni, Meier, Aragon, and

Perry (2011).

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Figure 1. Example of Honeywell WiFi Thermostat (WiFi 9000)

Honeywell designed the TCC thermostats to provide the following features:

Mobile connectivity for remote user-control of the thermostat;

Ease of use and programming compliance; and

Third-party communication and control for utility direct-load control programs.

Honeywell sells TCC thermostats through retail, trade, and utility channels. Homeowners purchase

connected thermostats for a variety of reasons, including increased convenience of use, enhanced

thermal comfort in the home, and reduced household energy use and costs.

Research Questions While the mobile connectivity of connected thermostats increases convenience and reduces the costs of

controlling home heating and cooling, its impact on energy use remains less certain.

To understand the potential impacts, consider a typical U.S. household using a traditional programmable

or non-programmable thermostat and seeking to maintain the home’s interior at a particular

temperature. The preferred temperature may change with the season, day of the week, and hour of the

day, and depends on the home’s occupancy, occupants’ thermal comfort, and energy costs. The cost of

controlling the thermostat, requiring users to be in the home, may prevent them from achieving their

preferred temperatures, and the home may be too hot or too cold.

Mobile connectivity can help users to achieve their preferred temperatures. Enhanced control of the

thermostat affects energy use for heating and cooling along two margins:

First, thermostat users may heat or cool the home more or less intensively (i.e., cool or heat the

home to a higher or lower temperature) while the home is space-conditioned. Cadmus calls

these changes on the “intensive margin.”

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Second, thermostat users may increase the amount of time (e.g., the number of days or hours

during the year) that they heat or cool the home. Cadmus calls these changes on “the

extensive margin.”

Energy savings occur if mobile connectivity causes a net decrease in heating or cooling energy use

because of changes on the intensive or extensive margins. As noted, mobile connectivity may allow

users to better align home heating and cooling with occupancy patterns—that is, to achieve savings

along the extensive margin. By reducing control costs, mobile connectivity also may allow users to heat

or cool less while the home is occupied—that is, to achieve savings along the intensive margin. For

example, using a mobile phone application, energy-efficient temperature set points can be adjusted in

the home without visiting the wall-mounted unit. To the extent that wasteful heating and cooling can be

eliminated without sacrificing thermal comfort, reductions in energy use would represent an

unambiguous increase in efficiency.

Ultimately, however, energy savings from connected thermostats remain an empirical question that can

be answered only by studying how people use them. This paper seeks to use data about user

interactions with Honeywell connected thermostats to better understand the thermostats’ impacts on

home energy use.

Specifically, the paper answers three questions:

1. What home space heating and cooling energy savings do Honeywell TCC thermostats produce?

2. What energy cost savings do the TCC thermostats produce?

3. How do energy and cost savings from TCC thermostats vary between U.S. climate zones?

Cadmus answered these questions by comparing average heating and cooling temperature set points in

homes with and without connected thermostats and then estimating energy savings as a function of the

difference. For a given home and length/severity of the heating (cooling) season, a higher (lower)

average heating temperature set point results in greater energy use. Conversely, a lower average set

point results in lower energy use for heating, thus producing greater savings.

Cadmus analyzed user-interface (UI) data from 2012 for almost 1,800 Honeywell TCC thermostats in

homes across the United States. The UI data provided a rich source of information about how early

adopters of Honeywell connected thermostats used them. To establish a baseline for connected

thermostat use, Cadmus analyzed household survey response data on thermostat set points from the

2009 Residential Energy Consumption Survey (RECS).

Energy Policy Relevance Energy savings from connected thermostats are worth study as the United States faces a growing

imperative to increase energy efficiency and reduce greenhouse gas emissions. Many states have set

energy-efficiency portfolio standards that mandate annual reductions in energy use against a baseline.

The federal government and states also have set increasingly stringent energy-efficiency building codes

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and appliance standards, establishing minimum efficiency levels for new building construction and

appliances. Finally, EPA’s proposed rule 111-D, regulating emissions from existing thermal power plants,

encourages states to reduce emissions by increasing site (end-use) energy efficiency as well as efficiency

of thermal electric generators.

This imperative has left regulators, policy makers, and utilities responsible for implementing efficiency

policies looking for new opportunities to increase residential energy savings. The residential sector

accounts for 22% of national end-use energy consumption, and, as noted, space conditioning remains

the largest residential energy end use. Thus, space conditioning presents an obvious potential source of

energy savings, and connected thermostats may offer a means to achieve some savings.

Little evidence exists, however, about energy savings from connected thermostats. The technology

remains new, and industry has commissioned few energy-savings studies. Several utilities plan to

operate (or are operating) pilot programs to test energy savings from connected thermostats, but, while

these studies will provide valuable evidence, they present a small scope and may have limited

applicability in other areas of the country.

This study offers an advantage in covering the entire United States and providing estimates of energy-

use savings for both heating and cooling.

Organization of this Report This report is organized as follows:

The second (next) section describes the study methodology, including model development, data

collection, model estimation, and energy and cost savings estimation.

The third section presents estimates of the differences in thermostat set points between homes

with and without Honeywell TCC thermostats and estimates of energy and energy cost savings

from connected thermostats.

The fourth section concludes and describes questions for future research.

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Methodology

Overview Honeywell provided Cadmus with UI data for a sample of 1,769 TCC thermostats installed in U.S. homes.

Each thermostat in the sample was installed before January 2012 and had 12 months of UI data

between January 2012 and January 2013. Users purchased the thermostats from retail outlets or home

space-conditioning contractors. As connected thermostats remained a relatively new product offering,

TCC thermostats purchasers during this period can be considered early adopters.

The UI data provided a rich view of how users interacted with their connected thermostats. When a TCC

thermostat senses an automatic or manual change to the thermostat settings or a change in the home’s

environment, the thermostat sends a report to Honeywell. A report includes a timestamp, heating and

cooling temperature set points, the interior temperature of the home, outdoor temperature, indoor

humidity, outdoor humidity, the relay status of heating and cooling systems, schedules for home heating

and cooling, and other fields. A thermostat may generate a few to a dozen reports per hour and

thousands or tens of thousands of reports per year.4

The UI data, however, presented some limitations when estimating energy savings from connected

thermostats:

First, the data do not provide direct information about energy use, and actual space-

conditioning equipment run times could not be inferred.5

Second, UI data only cover the post-adoption period and do not include information about

thermostat settings prior to adoption.

To establish a baseline for TCC thermostats, Cadmus relied on data from the U.S. Department of

Energy’s (DOE) Residential Energy Consumption Survey (RECS). In 2009, DOE surveyed 12,083 U.S.

households regarding different energy-use aspects for home heating and cooling, including:

Space-conditioning equipment types;

Thermostat types (programmable or non-programmable);

Thermostat settings by season and time of day;

Occupancy patterns; and

Housing characteristics (e.g., floor space, number of floors).

4 The UI data of the analysis sample did not include information on whether users accessed a TCC thermostat

with a mobile device or via the web, as opposed to a thermostat touchpad.

5 This study’s UI data did not capture space conditioning system relay status. As this study’s UI data did not

include thermostat calls for heating or cooling, Cadmus could not estimate run-times for space conditioning

units. Further, as users purchased thermostats through a retailer or home space-conditioning contractor and

not a utility program, utilities could not provide data on home electricity or gas use.

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We established a baseline for TCC thermostat homes using thermostat set points of RECS homes with

programmable or non-programmable thermostats. The 2009 RECS provides a valid baseline as the

survey preceded the widespread market introduction of connected thermostats.

As this study relied on a comparison of temperature set points between homes with TCC thermostats

and those in the RECS without them, a threat to the study’s internal validity was unobservable

characteristics that would cause adopters of TCC thermostats to choose more efficient temperature set

points. For example, TCC thermostats purchasers could have been more likely to be employed and thus

have lower daytime home occupancy rates, reducing their average temperature set points for heating. If

the analysis does not account for their lower home occupancy rates, TCC adopters would select lower

heating temperature set points, regardless of the thermostat type in their homes.

To minimize the potential for such omitted variable bias, Cadmus used a matching procedure—CEM—to

identify RECS households with similar incomes, home sizes, and locations as homes with TCC t-stats; we

did this before estimating differences in thermostat set points between homes with and without

connected thermostats. Cadmus then performed the analysis on matched observations in the RECS and

UI data. This matching procedure reduced the likelihood that differences in thermostat set points

between homes with and without connected thermostats resulted from unrelated factors.

Cadmus also used information about energy use for home heating and cooling in the RECS to estimate

the relationship between temperature set points and space conditioning energy use. The study

developed econometric models directly from thermodynamic models of energy use for home heating

and cooling, estimating them with data on RECS homes matched to TCC thermostat homes. Energy

savings from connected thermostats could then be estimated as a function of the difference in average

temperature set points between homes with and without connected thermostats.

Analysis Steps Specifically, Cadmus estimated energy savings from TCC thermostats using the following five steps:

1. Developing models of energy use for space heating and cooling.

2. Matching TCC homes to RECS homes using CEM.

3. Estimating cooling and heating energy-use models with matched RECS data.

4. Determining thermostat set points for TCC and RECS homes.

5. Estimating energy savings as a function of difference in set points between TCC and

RECS homes.

The remainder of this section describes each of these analysis steps in greater detail.

Step 1: Developing Home Space Conditioning Energy-Use Models

Cadmus’ first developed econometric models of home energy use for space heating and cooling. The

models related space conditioning energy use to thermostat temperature set points.

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Cadmus derived the estimating equations directly from thermodynamic models of home energy use for

heating and cooling. These models accounted for:

The home envelope area;

Wall and ceiling R values;

Space-conditioning equipment efficiency; and

The difference between the average thermostat set point and the average

outdoor temperature.

The estimating equations took the following form:

e = g(ceiling area x T , wall area x T, equipment type) (Equation 1)

Where:

e = Average energy use per hour for heating (cooling) in kBTUs.

Ceiling Area = Estimate of home ceiling area in square feet.

T = The difference between the average thermostat set point and the average

outside temperature.

Wall Area = Estimate of home exterior wall area in square feet.

Coefficients in the heating (cooling) model indicated average energy use per hour, per square foot of

floor space, for each degree of difference between the thermostat set point and outdoor temperature.

The coefficients had an explicit interpretation for home thermodynamics: they represented the product

of the average R value for the home’s envelope and the efficiency of the home’s space conditioning

equipment.

Step 2: Matching TCC homes to RECS homes

Next, Cadmus developed the RECS analysis sample, used to establish a baseline for connected-

thermostat homes. Cadmus used the CEM procedure to identify households in the 2009 RECS similar to

adopters of connected thermostats.6 We expected that households with the greatest expected benefit

of a connected thermostat would have been most likely to purchase one. Such households were likely

large consumers of energy for space conditioning. The purpose of employing CEM was to identify non-

purchasing households that were most like purchasers. CEM, a matching procedure used in social

scientific research for estimating causal effects, reduces imbalances between a treatment group (e.g.,

TCC thermostat homes) and a control group (e.g., RECS homes), increasing the likelihood that observed

differences between treatment and control group result from a causal effect of the treatment.

CEM involves four steps:

1. Identify the matching variables.

6 CEM references here.

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2. Coarsen each matching variable, creating bins for different ranges of values for the variable.

3. Identify treatment and control group observations that correspond exactly in terms of

coarsened matching variables.7 These observations belong to the same stratum, defined by

specific ranges or bins for each matching variable.

4. Drop the coarsened data and perform analysis on matched observations using original data.

Cadmus performed CEM on TCC thermostat and RECS homes using the following variables as major

drivers of energy use for home heating and cooling:

Household income

Home floor space (sq. ft.)

Reportable domain8

Building America Climate Zone9

Cadmus obtained data on these variables for TCC thermostat homes from InfoGroup, a supplier of

household-level data on demographics and housing characteristics, and obtained the same variables for

RECS homes from the survey.10

Table 1 shows the matching procedure results for TCC thermostat and RECS homes.

Table 1. Matched Analysis Samples

Table Heading Before CEM After CEM

TCC thermostat homes 1,769 653

RECS households 12,083 2,578

The final analysis sample included 653 TCC thermostat homes and 2,578 RECS households. TCC

thermostat homes and RECS households exactly matched in terms of the coarsened values of household

income, home floor space, reportable domain, and climate zone. Cadmus compared matched TCC

thermostat and RECS homes on the basis of other variables and found fairly strong correspondences.

7 CEM weights.

8 Reportable domain is a RECS variable that indicates the location of the home in one of 27 states or small

groupings of states (e.g., Kansas, Nebraska, North Dakota, and South Dakota).

9 Building American climate zone definitions can be found here:

http://apps1.eere.energy.gov/buildings/publications/pdfs/building_america/ba_climateguide_7_1.pdf

10 Cadmus did not use more variables for matching as additional variables would have resulted in excessive

attrition of TCC thermostat homes from UI data. Many TCC thermostat homes had missing values for one or

more variables in the InfoGroup data and could not be matched to the RECS.

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Figure 2 displays: the locations of TCC thermostat homes matched to the RECS; and homes not matched.

Purple indicates homes matched to the RECS, and yellow indicates those not matched. The size of the

circle indicates the number of homes in an area.

Figure 2. Geographic Distribution of TCC Thermostat Homes

Source: Cadmus analysis of locations of TCC thermostat adopters in 2012

As shown, early adopters of connected thermostats primarily lived in major urban areas of the

Northeast, Middle Atlantic, Midwest, and West Coast. The South and Mountain West indicated relatively

few connected thermostats, except for the cities of Dallas, Atlanta, and Salt Lake City. Notably, the

Southwest exhibited few adopters of connected thermostats. Similar spatial distributions distinguished

connected thermostat homes matched to RECS and those not matched to RECS.

Step 3: Estimating Models of Home Energy Use for Heating and Cooling

In the third step, Cadmus estimated the econometric models of home energy use for heating and

cooling using matched RECS data. The models took the specifications indicated by Equation 1. Cadmus

estimated: the models of heating energy use for each climate zone and heating equipment type; and the

models of cooling energy use for each climate zone.

Estimating Equation 1 required an estimate of the number of heating days (i.e., a day with an average

outside temperature less than 65⁰F) and an estimate of the average outside temperature across heating

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days in 2009 for each RECS home.11 For this purpose, Cadmus used hourly temperature data for 2009

from hundreds of National Oceanic and Atmospheric Administration U.S. weather stations. Cadmus

calculated the number of heating days and average outside temperatures during heating days for each

reportable domain and Building America climate zone combination. The study estimated the number of

hours during the heating season as 24 hours * number of days with average temperatures below 65⁰F.

Cadmus estimated the number of cooling days as the number of days with average outside daytime

temperatures above or equal to 75⁰F.

Cadmus then estimated Equation 1 by weighted least squares, with weights obtained from the CEM

procedure. These weights controlled for differences between treatment and control groups in strata

sizes: that is, in the number of matched observations. Cadmus estimated White standard errors to

account for heteroskedasticity (i.e., non-constant variance of the error term).

For all climate zones, the estimated coefficients in the heating and cooling models were positive and

statistically significant. As noted, these coefficients indicated energy-use intensities per degree of

difference between the thermostat average temperature set point and the average outside

temperature. Cadmus verified that on average, the models yielded accurate predictions of energy use

for homes in the analysis sample.

Using the regression results, Cadmus estimated the percent of energy savings and energy cost savings

resulting for a home adjusting its thermostat setting downward (upward) by one degree during the

heating (cooling) season. The estimates applied to U.S. households with house sizes, incomes, locations,

and climates similar to those of TCC thermostat adopters. This analysis did not indicate energy savings

from connected thermostats, a calculation that first requires estimating the impact of connected

thermostats on temperature set points.

Figure 3 and Figure 4 show, respectively: energy and dollar cost savings estimates for matched U.S.

households from a 1⁰F change in temperature set points. The energy savings estimates assumed normal

weather (TMY 2010) and the energy cost savings assumed residential retail prices for energy (e.g.,

electricity, natural gas, and fuel oil) in 2013, as reported by the Energy Information Administration (EIA).

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RECS reports heating degree days (base temperature 65⁰F) and cooling degree days (base temperature 65⁰F),

but not average outside temperatures. To calculate average temperatures during the heating or cooling

season, one must know the number of days with temperatures greater than 65⁰F.

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Figure 3. Percent Energy Savings for Heating from 1⁰F Adjustment of Thermostat Setting

Notes: Results based on Cadmus analysis. See text for details.

Adjusting the temperature set point downward by an average of 1⁰F would save 4.3% of energy use for

heating. Savings depended on a number of factors, including: the demand for space conditioning, the

efficiency of space conditioning equipment, and the thermal efficiency of the home’s envelope.

Similarly, for cooling, adjusting the thermostat upward by an average of 1⁰F would save 12.1% of cooling

energy use. Together, the adjustments would save 5.7% of a home’s energy use for space conditioning.

As space conditioning accounts for 40-50% of energy use in a typical U.S. home, energy savings from TCC

thermostats would equal about 2.5% of home energy use.

Figure 4. Energy Cost Savings for Cooling from 1⁰F Adjustment of Thermostat

Notes: Results based on Cadmus analysis. See text for details.

4.3%

12.1%

5.7%

0%

2%

4%

6%

8%

10%

12%

14%

Heating Cooling Total

$24

$61

$85

$0

$10

$20

$30

$40

$50

$60

$70

$80

$90

Heating Cooling Total

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Using the EIA retail energy price data, Cadmus translated these energy savings into cost savings.

Decreasing a home’s thermostat setting by an average of 1⁰F would save $24 in heating costs for the

average home, and increasing a home’s thermostat setting by 1⁰F would save $61 in cooling costs for

the average home. Total cost savings would average $85 per home.

Step 4: Determining the Effect of TCC Thermostats on Temperature Set Points

Cadmus estimated the difference in average temperature set points for heating and cooling between

matched TCC thermostat homes and RECS homes. Due to CEM, differences in temperature set points

accounted for the impacts of household incomes, home sizes, reportable domains, and climate zones on

thermostat settings.

Cadmus estimated temperature set points in TCC thermostat homes as the average set point between

December and March during hours with the home’s heating system switched to on. The study limited

the analysis to the December to the end of March period to remain consistent with the RECS, which

asked respondents to report thermostat set points for heating “during winter.” Similarly, for cooling,

Cadmus estimated thermostat average temperature set points in TCC thermostat homes as the average

during the summer months of June, July, August, and September, with cooling systems switched to on.

RECS asked respondents to report thermostat set points “during summer.”

Step 5: Estimating Energy Savings

The final analysis step estimated energy and energy cost savings for heating and cooling from TCC

thermostats. The following equation estimated energy savings for a normal weather year:

TCC thermostat energy savings per home = F x s x h (Equation 2)

Where:

F = difference between matched TCC thermostat homes and RECS homes in average thermostat

temperature set points

s = regression-based estimate of energy savings per hour, per degree of setback for the

average home

h = heating (cooling) hours in a normal weather year

Calculating s—the energy savings (in kBTUs) per hour, per degree of setback—required evaluating

Equation 1 for particular values of roof and exterior wall areas. Cadmus selected the average roof and

wall areas in the analysis sample or climate zone analysis subsample for this calculation.

Cadmus estimated the energy cost savings as:

TCC Thermostat energy cost savings = p * TCC thermostat energy savings per home (Equation 3)

Where:

p = the average retail price per kBTU for energy used in heating or cooling

16

Cadmus then estimated p for heating using EIA data on 2013 residential retail prices of electricity,

natural gas, and heating oil during the heating months of December, January, February, and March. The

analysis determined p as a weighted average of these prices, with weights equal to each energy source’s

share of total energy use in kBTUs. The analysis also determined p for cooling using 2013 EIA data on

electricity prices during the cooling months of June, July, August, and September.

The following section presents energy savings and energy cost savings estimates for heating and cooling

for an average home in each climate zone and in the United States.

17

TCC Thermostat Savings Estimates

Cadmus estimated energy savings for home heating and cooling from Honeywell TCC thermostats as a

function of the difference in average temperature set points between homes with and without TCC

thermostats. This section presents estimates of the differences in thermostat set points, followed by

estimates of annual energy savings and energy cost savings.

Differences in Thermostat Interior Temperature Set Points Figure 5 shows average heating temperature set points in matched Honeywell TCC thermostat homes

and RECS homes.

Figure 5. Average Thermostat Temperature Set Points—Heating Season

Note: TCC thermostat set points estimated for hours with heating systems switched to on, between December and

March. All differences were statistically significant at the 5% level, except in the Very Cold/Cold region.

Matched RECS homes exhibited an average heating temperature set point of 67.1⁰F. Significant

differences occurred, however, in set points between climate zones. Homes in warm or temperate

regions of the United States (such as the Hot-Humid, Hot-Dry/Mixed Dry, and Mixed-Humid climate

zones) exhibited higher average set points. These differences could reflect differences in residents’

tolerance for cold and thermal comfort between U.S. regions. As these climate zones produced higher

average temperature set points, they likely offered greater potential for energy savings.

The difference in average heating temperature set points between TCC thermostat and RECS homes was

1.1⁰F, indicating homes with connected thermostats were heated at lower levels by approximately 1⁰F.

This difference proved statistically significant at the 5% level. Notably, as this average difference

occurred across all hours, it can be considered large.

64.9

66.0 66.3

66.8

66.1 66.0

67.3

69.0

65.0

67.4

66.5

67.1

62

63

64

65

66

67

68

69

70

Hot-Dry/Mixed-Dry Hot-Humid Marine Mixed-Humid Very Cold/Cold All climate zones

○F

TCC Tstat Set Points RECS Tstat Set Points

18

In each climate zone (except Marine), TCC thermostat homes exhibited lower average heating

temperature set points.12 All climate zone differences in thermostat set points proved statistically

significant, except for the Very Cold/Cold Climate zone. The biggest differences in average heating

temperature set points occurred in the Hot-Humid and Hot-Dry/Mixed-Dry climate zones.

Figure 6 presents estimates of average cooling temperature set points for homes with and without TCC

thermostats. RECS homes exhibited an average thermostat set point of 74.2⁰F. Homes in the Very

Cold/Cold and Marine climate zones exhibited the lowest average set points and thus offered the

greatest potential for energy savings.13

12 Cadmus investigated several hypotheses to explain why average temperature set points in the Marine climate

zone were 1.3 degrees higher in TCC thermostat homes. Cadmus did not find any outliers in average

temperature set points in TCC thermostat or RECS homes. We also looked for differences between RECS and

TCC thermostat homes in locations and micro-climates within the Marine climate zone. RECS reported only the

state and climate zone for each home, so it was not possible to identify their precise locations and to directly

compare them to the locations of TCC thermostat homes. However, using postal codes, Cadmus plotted the

locations of TCC thermostat homes and did not find any unusual location patterns. The homes were clustered

around the population centers of Portland, Seattle, San Francisco, Oakland, and San Jose. Another hypothesis

is that there was strong positive selection in space-conditioning energy use: Purchasers of connected

thermostats may have intensively heated or cooled their homes and had high average temperature set points

in winter or low average temperature set points in summer as a consequence. Finally, the number of TCC

thermostat homes in the Marine climate zone (N=51) in the analysis sample was small, so analysis of a larger

sample might yield a different result.

13 We do not report estimates for the Marine climate zone as the zone did not produce sufficient homes with air

conditioning to estimate savings. The Marine climate zone accounted for about 8% of the TCC thermostats in

the sample. The distribution of remaining homes in the TCC thermostat analysis sample across other climate

zones was as follows: Hot-Dry/Mixed-Dry, 10%; Hot-Humid, 15%; Mixed-Humid, 27%; and Very Cold/Cold,

40%.

19

Figure 6. Average Thermostat Temperature Set Points—Cooling Season

Notes: TCC thermostat set points estimated for hours when cooling system switched to on, between June

and September. All differences were statistically significant at the 5% level, except in the Hot-Dry/Mixed-Dry

climate zone.

The difference in average cooling temperature set point between TCC thermostat homes and RECS

homes was 1.9⁰F, indicating TCC thermostat homes were cooled an average of 2⁰F less. In each climate

zone, TCC thermostat homes exhibited higher average temperature set points. All differences in

thermostat set points proved statistically significant, except for the Hot-Dry/Mixed-Dry climate zone.

In summary, the comparison of thermostat set points suggests homes with TCC thermostats used less

energy for heating and cooling. Homes with TCC thermostats experienced lower average temperature

set points for heating and higher average temperature set points for cooling.

Energy and Energy Cost Savings from TCC Thermostats As described in the methodology section, Cadmus used results from the space conditioning energy use

models to estimate energy savings per home from TCC thermostats. In addition to the difference in

temperature set points between TCC thermostat and RECS homes, energy savings estimates

depended on:

Demand for heating or cooling;

The efficiency of space conditioning equipment; and

The thermal efficiency of the home’s envelope.

76.7 76.9

75.6 75.3

76.1 76.2 75.8

73.3 73.5

74.2

71

72

73

74

75

76

77

78

Hot-Dry/Mixed-Dry Hot-Humid Mixed-Humid Very Cold/Cold All climate zones except marine

○F

TCC Tstat Set Points RECS Tstat Set Points

20

For example, homes in the Hot-Humid region experienced higher demand for cooling during summer

and, with all else equal, would have greater energy savings than homes in the rest of the United States.

Cadmus estimated energy savings assuming normal weather. Energy cost savings also depended on the

retail price of energy.

As Figure 7 shows, the average U.S. home with a Honeywell connected thermostat reduced energy use

for heating by 4.5% and 19.4% for cooling during a normal weather year. Cooling produced a larger

percentage energy savings than heating because the difference in average temperature set points

between TCC thermostat and RECS homes constituted a larger percentage of the difference between

the average temperature set point and the average outdoor temperature during the cooling season.

Figure 7. TCC Thermostat Percent Space Conditioning Energy Savings in Normal Weather Year

Note: Results based on Cadmus analysis. See text for details.

Overall, energy savings for space conditioning from TCC thermostats would be 6.6% during normal

weather—an estimate much closer to estimated percent savings for heating, as heating accounts for

seven times as much home energy use as cooling (42% vs. 6%).

Figure 8 shows heating and cooling energy cost savings for U.S. homes. The average home with a TCC

thermostat would save $25 in energy costs for heating and $91 in energy costs for cooling during a

normal weather year. Total energy cost savings from space heating and cooling would equal $116.

4.5%

19.4%

6.6%

0%

5%

10%

15%

20%

25%

Heating Cooling Total

21

Figure 8. TCC Thermostat Annual Energy Cost Savings Per Home

Notes: Estimates of cost savings assume a normal weather year and 2013 energy prices. See the

methodology section for estimation details.

Regional Savings Estimates

Figure 5 and Figure 6 show significant differences between climate zones regarding the impacts of TCC

thermostats on average heating and cooling temperature set points. How did these differences affect

climate zone energy and energy cost savings?

Figure 9 and Figure 10 show climate zone estimates of TCC thermostat percent energy and energy cost

savings for, respectively, heating and cooling. Also, Figure 9 shows savings of natural gas for space

heating in therms, and Figure 10 shows savings of electricity for space cooling in kWh.14 Significant

differences occurred in energy and cost savings between climate zones, with the greatest contributing

factor as difference in average temperature set points between homes with and without connected

thermostats (though other factors, such as the demand for air conditioning, thermal efficiency of the

home’s envelope, and energy costs contributed).

Per the analysis of climate-zone energy savings shown in Figure 9, the Hot-Humid and Hot-Dry/Mixed

Dry climate zones produced the greatest energy savings for space heating. The average TCC thermostat

home in these zones saved about 18% and 16%, respectively, of energy use for heating during a normal

14

Cadmus translated average kBTU energy savings for space heating into therms. While the percent and cost savings in Figure 9 and Figure 10 represent averages across homes that used natural gas, electricity, or fuel oil for space heating, natural gas was the predominant fuel source in each climate zone. In the Hot-Dry/Mixed-Dry, Marine, and Very Cold/Cold climate zones, 90% or more of energy use for space heating came from natural gas. In the Hot-Humid and Mixed-Humid zones, about 83% of energy use for space heating came from natural gas.

$25

$91

$116

$0

$20

$40

$60

$80

$100

$120

$140

Heating Cooling Total

22

weather year. These savings correspond to about 36 and 38 therms per home per year. Notably, these

two regions exhibited the highest average temperature set points and, thus, some of the greatest

potential for savings. The Hot-Humid and Hot-Dry/Mixed dry climate zones exhibited substantial energy

cost savings, equal to $70 and $39, respectively.

In contrast, despite exhibiting the greatest space-heating demand (and thus large potential energy

savings), homes in the Very Cold/Cold and Mixed-Humid climate zones offered a very small energy and

energy cost-savings during a normal weather year, largely due to minor difference in average

temperature set points between TCC thermostat homes and RECS homes, as shown in Figure 5.

Figure 9. TCC Thermostat Space Heating Energy and Cost Savings by Climate Zone

Source: Cadmus analysis. See text for details.

Cadmus’ analysis of cooling energy savings by climate-zone in Figure 10 shows the most humid regions

of the United States achieved the greatest energy and energy cost-savings. In the Hot-Humid and Mixed-

Humid climate zones, homes saved, on average $172 and $121, respectively, per home in a normal

weather year. Homes in these humid climate zones produced high demand for air conditioning.

$39

16.0% 36 therms

$9

1.3% 10 therms

$15

2.6% 13 therms

$70

18.1% 38 therms

-$50

-8.4% -43 therms

23

Figure 10. TCC Thermostat Space Cooling Energy and Cost Savings by Climate Zone

Source: Cadmus analysis. See text for details.

Homes in the Hot-Dry/Mixed-Dry climate zone exhibited a small percent of energy savings and energy

cost savings, an effect explained (as shown in Figure 2) by the few homes with TCC thermostats in the

desert Southwest. Rather, most TCC thermostat homes in the Hot-Dry/Mixed-Dry climate zone were

located in more temperate coastal Southern California.

Homes in the Very Cold/Cold climate zone achieved large percentage of energy savings for cooling

(19.7%) and modest energy cost savings of $47 per home during a normal weather year. Homes in this

zone exhibited low average cooling temperature set points and high potential for energy savings: the

high percentage savings reflect this potential. However, homes in this zone also exhibited small total

cooling loads, limiting the energy savings potential. The modest energy cost savings reflected relatively

low demand for space cooling.

Figure 11 shows the sum of space-heating and space-cooling energy savings and energy cost-savings

from Honeywell TCC thermostats. Total space-conditioning energy savings during a normal weather

year are greatest in the Mixed-Humid and Hot-Humid climate zones.

N/A $47

19.7% 326 kWh

$121

29.1% 903 kWh $172

14.1% 1,121 kWh

$18

4.0% 132 kWh

24

Figure 11. TCC Thermostat Total Space Conditioning Percent Energy and Cost Savings by Climate Zone

Source: Cadmus analysis. See text for details.

TCC Thermostat Cost-Effectiveness Many homeowners seeking to reduce home heating and cooling costs will want to compare the

expected energy cost savings with the incremental cost of a TCC thermostat. Energy-efficiency

policymakers will also be interested in this comparison because in many jurisdictions rate-payer funded

efficiency measures are required to pass the Participant Cost Test, a comparison of the benefits and

costs of the customer installing the measure.

Table 2 shows the annual energy cost savings per home and the approximate payback period, the

minimum number of years required to achieve energy cost savings equal to the incremental cost of a

TCC thermostat relative to a standard programmable thermostat. To calculate the payback period,

Cadmus assumed an incremental cost of $100 and discounted energy cost savings at an annual rate of

8%.

N/A

$57

12.0%

$57

2.7%

$135

7.0%

$242

15.8%

25

Table 2. TCC Thermostat Payback Period

Climate Zone

Annual energy

cost savings per

home

Approximate

Payback Period

Hot-Dry/Mixed-Dry $57 <2 years

Hot-Humid $242 <1 year

Mixed-Humid $135 <1 year

Very Cold/Cold $57 <2 years

All climate zones except marine $116 <2 years

Notes: Payback period was estimated as the minimum number of years required to achieve average energy cost savings equal to the incremental cost of a TCC thermostat. Annual energy cost savings equal sum of heating and cooling energy cost savings. Analysis assumes the discount rate equals 8%, the incremental cost of connected thermostat equals $100, and that future energy prices do not change from 2013 levels. We did not report a payback period for Marine climate zone because this zone's cooling energy cost savings was not estimated.

Depending on the climate zone, the average annual energy cost savings per home (the sum of heating

and cooling energy cost savings) ranged between $57 and $242, and the payback period for TCC

thermostats ranged from one to two years. This means that it would take one or two years for the

average home to save $100 in energy costs and to cover the additional cost of a TCC thermostat. Homes

in the Hot-Humid and Mixed-Humid climate zones have the greatest annual energy cost savings and

shortest payback period (less than one year). As energy cost savings were smaller, homes in the Very

Cold/Cold and Hot-Dry/Mixed-Dry region have longer payback period of between one and two years.

Across U.S. climate zones except Marine, the average annual energy cost savings were $116 per home

and the average payback period was between one and two years.

In summary, these results suggest that adoption of TCC thermostats would be very cost-effective for

households in many climate zones.

Cost of Saved Energy for Utility Connected Thermostat Efficiency Programs

While this paper analyzed data from Honeywell TCC thermostats purchased through retail or trade

contractor channels, electric and gas utilities may want to know the average cost of saved energy from

connected thermostats deployed through energy efficiency programs. In this section, we present

estimates of the cost of saved energy for a representative utility direct-install efficiency program

involving Honeywell TCC thermostats. We provide separate estimates of utility average cost of kWh

savings from space cooling and utility average cost of therm savings from space heating. To estimate the

average cost of saved energy, Cadmus used the TCC thermostat energy-savings estimates in Figure 9 and

Figure 10 and assumptions about the costs of administering a direct-install efficiency program.

Cadmus estimated the average cost of saved energy under different assumptions about the utility’s

average cost of deploying a connected thermostat, including low-cost and high-cost scenarios. We

26

assume the cost of administering the program include the costs of program design, direct marketing,

hardware acquisition, contractor training and certification, participant recruitment and incentives,

contractor installation of the thermostats, and program evaluation. The high costs scenario would

correspond to smaller programs or those with more expensive direct marketing, recruitment, contractor

training, and installation costs. We assume a cost of $400 per thermostat for the low costs scenario and

$700 per thermostat for the high costs scenario.

We estimated the average cost of saved energy as the utility’s average cost of deploying a TCC

thermostat in a home divided by the thermostat’s average lifetime energy savings. To estimate lifetime

savings, we assumed that the average lifetime of a TCC thermostat was 10 years and multiplied the

average life time the average annual energy savings per thermostat.

Table 3 shows estimates by climate zone of utility average cost of kWh savings from space cooling and

average cost of therm savings from space heating. We estimated the costs of saved energy for space

heating and cooling independently, that is, we did not account that a utility could use the thermostats to

save both heating and cooling energy.

Table 3. Average Cost of Saved Energy for TCC Thermostat Efficiency Program

Space Cooling Energy Savings

Costs ($/kWh) Space Heating Energy Savings Costs

($/therm)

Climate Zone Low Program

Costs Scenario High Program Costs Scenario

Low Program Costs Scenario

High Program

Costs Scenario

Hot-Dry/Mixed-Dry $0.30 $0.53 $1.12 $1.97

Hot-Humid $0.04 $0.06 $1.07 $1.87

Mixed-Humid $0.04 $0.08 $2.96 $5.18

Very Cold/Cold $0.12 $0.21 $4.23 $7.40

All climate zones except marine $0.06 $0.11 $2.17 $3.79

Notes: Average cost of energy savings estimated as the assumed cost per installed TCC thermostat divided by average lifetime thermostat savings. Cadmus assumed TCC thermostats have an average life of 10 years. Low program costs scenario assumes program average deployment cost per thermostat of $400. High costs scenario assumes program average deployment cost per thermostat of $700. See text for estimation details.

Across the U.S., utility average cost of cooling savings would be $0.06/kWh for the low program costs

scenario and $0.11/kWh for the high program costs scenario. The cost of saved energy for the low

program costs scenario is equal to the median levelized cost of saved energy ($0.06/kWh) for utility

residential whole home or direct install program in the U.S. (LBNL, 2014).15

Utility average cost of heating savings would be $2.17/therm for the low program costs scenario and

$3.79/therm for the high program costs scenario. This average cost per them savings from a TCC

15

LBNL based this estimate on an analysis of 19 residential whole home/direct install utility electricity efficiency programs. See LBNL (2014), p. 34.

27

thermostat program would exceed the national average cost of lifetime saved energy for residential gas

efficiency programs of $0.32/therm (LBNL, 2014). The utility average cost of therm savings also exceeds

the 2013 average city gate price of natural gas, which ranged from a low of $0.39/therm (Idaho) to a

high of $0.62/therm (Vermont) in the continental U.S. (EIA, 2013). It should be noted, however, that the

cost of therm savings compares unfavorably in part because natural gas costs are at recent historic lows.

Utility average cost of saved energy from TCC thermostats varied significantly by climate zone in

accordance with the estimated annual energy savings. The Hot-Humid ($0.04/kWh) and Mixed-Humid

($0.04/kWh) climate zones) had the lowest cost of saved energy for the low program costs scenario.

This cost of saved energy compares favorably with the national median levelized cost of saved energy

($0.06/kWh) for utility residential whole home or direct install program (LBNL, 2014). The Very

Cold/Cold ($0.12/kWh) and Hot-Dry/Mixed-Dry ($0.30/kWh) climate zones had higher utility average

cost of saved electricity.

Utility average cost of therm savings was lowest in the Hot-Dry/Mixed-Dry ($1.12/therm) and Hot-

Humid ($1.07/therm) climate zones. Nevertheless, these costs of saved energy still exceeded the

national average cost of lifetime saved energy for residential gas efficiency programs.

While this analysis suggests a utility’s cost of achieving energy savings with Honeywell TCC thermostats,

it does not account for all of the utility’s benefits. The estimates of costs of saved energy do not account

for all of the benefits to a utility that wants to use the thermostats to achieve space-heating and space-

cooling energy savings. Also, electric utilities wanting to manage system peak loads can use TCC

thermostats to control residential or small commercial customer space-conditioning loads. Utilities

wanting both energy and peak demand savings will want to consider both potential benefits.

28

Conclusions

Connected thermostats may reduce energy use for home space conditioning. Mobile connectivity

reduces the cost of control for home heating and cooling, and helps users better maintain their

preferred interior temperatures. This reduction in the cost of control may result in energy savings.

In this study, Cadmus estimated energy savings from Honeywell TCC thermostats. This required

analyzing UI data for approximately 1,800 homes with TCC thermostats and comparing average

temperature set points of thermostats in those homes to self-reported thermostat set points for homes

in the 2009 RECS. Cadmus then estimated energy savings for space conditioning as a function of the

difference in average temperature set points between TCC thermostat homes and RECS homes.

This study did not consider the potential benefits to utilities of using Honeywell TCC thermostats to

manage residential space-conditioning loads to obtain peak-demand savings. Honeywell is running

several pilot studies to evaluate the thermostats’ peak demand savings.

Summary of Main Findings Overall, Cadmus’ analysis suggests that Honeywell TCC thermostats purchased through retail channels

or space-conditioning contractors saved significant energy for the average adopter and adoption proved

highly cost-effective in many U.S. climate zones.

The energy savings analysis resulted in the following specific findings:

On average, Honeywell TCC thermostats would save about 5% of energy use for home space

heating and 19% of energy use for home cooling during a normal weather year. In total, TCC

thermostats would save about 7% of energy use for heating and cooling.

Honeywell TCC thermostats would save about $25 per home per year in space heating energy

costs and $91 per home per year in space cooling energy costs during a normal weather year.

Total energy cost savings would be $116 per home per year.

Despite small sample sizes for some climate zones, analysis suggests energy and energy cost

savings vary significantly between zones. Savings depend on zone-specific demand for heating

or cooling and the impact of Honeywell TCC thermostats on temperature set points.

The Hot-Humid and Hot-Dry/Mixed-Dry climate zones offer the greatest heating energy savings

and energy cost savings. Homes without connected thermostats in these zones have the highest

average heating temperature set points and, therefore, some of the greatest potential for

energy savings. Estimated space-heating energy cost savings in these regions would be,

respectively, $70 and $39 per home per year.

The Hot-Humid and Mixed-Humid climate zones offered the greatest cooling energy savings and

energy cost savings. As some of warmest and most humid zones in the United States, they offer

the greatest demand for air conditioning. Estimated space-cooling energy cost savings in these

regions would be, respectively, $172 and $121 per home per year.

29

Connected thermostats proved very cost-effective for homeowners in many climate zones. In

the Hot-Humid and Mixed-Humid climate zones, annual energy cost savings would cover or

almost cover the incremental cost of a Honeywell TCC thermostat. Homes in the Mixed-Dry/Hot-

Dry and Very Cold/Cold climate zones would achieve a positive return on their investment after

between one and two years.

The average cost of saved energy for a Honeywell TCC thermostat utility direct-install program

would be $0.06 per kWh, which equals the median levelized cost of saved energy ($0.06/kWh)

for utility residential whole home or direct install program in the U.S. (LBNL, 2014).

Future Research In performing this research, Cadmus identified a number of questions for future research:

This analysis pertains to very early adopters of Honeywell TCC thermostats. Do subsequent

adopters experience the same, lower, or higher energy savings?

Energy savings and energy cost savings estimates differ substantially between climate zones

(though based on relatively small analysis sample sizes). Do such differences between climate

zones remain among more recent adopters?

How do adopters achieve energy savings? Adopters of TCC thermostats could have saved energy

by reducing the intensity of space conditioning when their heating or cooling system were on or

by reducing the number of days or hours that space-conditioning units were switched to on.

How persistent are energy savings from TCC thermostats? Do savings increase, decrease, or stay

the same with time since adoption?

Cadmus is performing a second national impact study to answer these questions. The study will analyze

UI data from 2013 for a very large number of homes with Honeywell TCC thermostats. Cadmus will

update this study’s results and provide a more comprehensive set of findings about energy savings from

Honeywell connected thermostats.

30

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Jacobsen, Grant D. and Matthew J. Kotchen. “Are Building Codes Effective at Savings Energy?” Evidence

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Lawrence Berkeley National Laboratory. The Program Administrator Cost of Energy Saved for Utility

Customer-Funded Energy Efficiency Programs. Prepared for U.S. Department of Energy by Megan A.

Billingsley, Ian M. Hoffman, Elizabeth Stuart, Steven R. Schiller, Charles A. Goldman, and Kristina La

Commare. March 2014.

Peffer, Therese, Marci Pritoni, Alan Meier, Cecilia Aragon, and Daniel Perry. “How People Use

Thermostats in Homes: A Review.” Building and Environment 46, 2529-2541. 2011.