Smart Thermostat Market Trends

Growth Drivers

• Rising Trend of Smart Homes – The utilization rate of smart thermostats is attributed to an increase owing to the rising number of smart homes across the world. Rising living standards and smart homes have significantly increased the demand for automatic heating and cooling systems for devices and room temperature. By the end of 2022, the count of smart homes worldwide surpassed around 308 million and is projected to increase by nearly 670 million smart homes throughout the world by 2025.
• Increase Use of Smart Devices – With the growing spending capacity, people have been adopting smart home devices and building automation systems. This factor is anticipated to accelerate the demand for smart thermostats and further boost the market value in the coming years. In 2022, almost 57 million households living in the United States were using smart home devices. This number is subsequently forecasted to reach almost 65 million households by the end of 2025.
• Drastic Global Climate Change – Rapid industrialization has led to massive carbon emissions which have resulted in the problem of climate change within the past few decades. Therefore, with the rising temperature and unpredictability of the weather residential, thermostats are expected to become a utility and help in the expansion of the smart thermostat market size during the projected timeframe. The National Oceanic and Atmospheric Administration (NOAA) stated that the temperature of ocean and land has increased at an average rate of 0.14 degrees Fahrenheit per decade since 1880.
• Emergence of the Latest IoT-enabled Thermostats – IoT-integrated, as well as Wi-Fi-enabled smart thermostats, are gaining popularity owing to their ability to automatically modify temperature after observing, monitoring, and studying the user settings and preferences. Thus, this trend is poised to bring favorable opportunities for market growth shortly.

Challenges

• High Initial Investment and Installation Costs – Hefty amounts of money are required to develop advanced smart thermostats. Also, skilled professionals are required for the installation of smart thermostats. These factors couple up to increase the overall cost of smart thermostats which makes it difficult for populations with middle and small income to adopt smart thermostats and subsequently hamper the market growth in the longer run.
• Lack of Technology Awareness
• Increased Maintenance Costs for Upgradation of Existing Systems