Cold Cash

How the Nest Thermostat Could Save the Planet

The Nest thermostat promises to save energy by automatically adjusting to user habits. But does it work?

Can a $250, Apple-like programmable thermostat save the planet?

Residential heating and cooling consumes about 10 percent of U.S. energy production. Heating and cooling accounts for about half of the total energy bill of a typical American household. So if a device can help make a significant dent in usage, it can save a lot of watts, a lot of money, and a lot of emissions.

But the traditional ways of reducing home heating and cooling costs—turning the thermostat down in the winter, turning it up in the summer—are pretty blunt instruments. The demand for energy in a home can vary greatly over the course of a day and a month. It would be much easier if somebody—or something—was watching your habits, figuring out when you didn’t it mind it being a little colder or when you were gone or when you were not occupying parts of the house, and then adjusted the temperature accordingly.

That’s what Nest does.

Programmable thermostats have been around for awhile. But people aren’t always rational. They neglect to program them or don’t bother to use the most useful features. In the U.S., says Tony Fadell, chief executive officer of Nest, there are some 250 million thermostats, of which only 40 percent are programmable. And of those, only 10 percent have been programmed to save energy.

Why? Programmable thermostats are designed by engineers, and pitched toward installers—people who, in other words, never actually use them. “They never make it easy or clever to put in your schedule,” said Fadell, a longtime Apple executive who helped create the iPod. “There was very little consumer orientation.”

The best energy-saving ideas—car engines that turn off in neutral, timers that turn off electric lights when nobody is in the room—remove human agency from the equation. So the gang behind Nest set out to create a thermostat that is programmable, but that would also program itself, based on consumer behavior. “It learns what you want, and predicts what you want in the future, and if you don’t like it, you simply change it,” said Fadell. “And it learns from that and it continually adapts.” In addition, the Nest designers concluded it should be able to downshift to a state of lower energy usage when the house is empty, and it should be able to be manipulated via a smartphone. The final innovation? Nest would bypass installers and go directly to consumers.

The first ones went on sale in October 2011 and sold out quickly. The devices do have an Apple feel—the clean, round design, the simple interface. And they are relatively easy to use. If you’re not comfortable with the temperature, swipe your hand in front to wake it up and adjust the dial. Eventually, by keeping track of your changes, the Nest learns what appear to be your habits—that you like it at 72 at night, or that you dial back the a/c at 9:00 a.m. The “away” function lets you pre-set parameters for how cold or hot the house can get when you’re in it. Once you register the products and create an account online, you can adjust the temperature remotely. The connectivity allows for data to flow in both directions. Nest aggregates the data collects and provides a free monthly report that allows energy geeks to track their usage. Nest also blasts software releases (18 so far) that update the device.

Nest, which is privately held and based in (where else?) Palo Alto, California, doesn’t give out sales figures. The company notes that the devices, which are assembled in China, are available at some 4,500 retailers.

So how should I expect this device to save me? It depends, said Fadell, on whether the user’s primary goal is saving energy or being very comfortable. “We’ve seen anywhere from 5 percent to 60 percent reductions,” he said. A typical home can reduce heating and cooling costs by between 20 and 30 percent, regardless of geographic location. Nest notes that its customers have collectively reduced their usage by 80 million kilowatt hours (compared with their pre-Nest energy profile), which is enough to take the entire American economy off the grid for 15 minutes.

Fadell says that the Nest can only optimize temperature control. It can’t do much about other factors that affect efficiency, like poor insulation, leaky roofs, and open windows. The Nest’s value is that it can help people make the best, most rational, and intelligent use of energy—given the way they like to use energy and the physical condition of their homes. Other features include True Radiant, which compensates for the longer time it takes for baseboard systems to adjust temperatures. In addition, Nests could help households play a role in demand-response programs—initiatives in which customers dial down usage of utilities during peak demand.

Earlier this month, I installed two Nests in my home—or, more accurately, I had them installed by a local company recommended by the company. While Nest says its products can easily be installed by laypeople, this layperson was easily stymied. The devices are up and running. Over the next several months, I’ll report back occasionally on how they’re doing. I’m interested to see whether the Nest will help me reduce energy costs. I’m even more interested to see whether it will lessen the arguments my wife and I have over air conditioning in the summer—and whether I can program it to take my side.