Do smart plugs and thermostats save money? When they cut the bill and when they do not

A smart thermostat can lower your heating bill, but only by changing when and how much the home is heated: fewer warm hours while nobody is in or everyone is asleep. In the US, thermostats certified by ENERGY STAR, the US government’s efficiency label, save on average about 8% of heating and cooling bills, and less in homes that are always occupied.

A smart plug saves money only when it switches off something that wastes real power while unused. It draws a little power itself, so on a recent TV or microwave in standby it can cost more than it saves.

Where does the energy in a home go?

In the EU, the main use of energy by households in 2024 was heating homes, at 61.5% of final energy consumption in the residential sector, according to Eurostat; lighting and most electrical appliances together took 14.8%. In the US, ENERGY STAR puts heating and cooling at almost half of the average household’s annual energy bill, more than $900 a year.

So the same percentage saving is worth far more on heating, which a thermostat controls, than on a single socket.

How does a smart thermostat save energy?

A home loses heat faster the warmer it is inside compared with outside. Every hour the heating holds a lower temperature, at night or while everyone is out, the boiler or heat pump runs less. A smart thermostat does what a programmable one always could, but makes it easier: schedules set from a phone, an “away” mode triggered when your phone leaves home, and in some models a schedule learned from your habits. ENERGY STAR notes that owners of programmable thermostats often do not understand them and may not program them at all.

What makes the ENERGY STAR figure useful is how it is measured. Instead of a lab test, the company that operates each thermostat’s service analyzes a year of data from a sample of real homes across the US with EPA software. Heating must run at least 8% less, and cooling at least 10% less, than with the installed base of other thermostats, and a second test on the lower end of the sample (the 20th percentile) stops the result resting on a few homes that saved a lot. The test uses homes in the US; elsewhere, treat a percentage printed on the box as the maker’s own claim.

When does a smart thermostat not save?

The saving comes from lowering the temperature for part of the day, so it shrinks when there is little to lower. ENERGY STAR says homes that are always occupied see less saving, and that savings are generally slightly lower in temperate climates. If you already turn the heating down at night and when you go out, a smart thermostat adds convenience more than savings.

Habits can also cancel the effect. Introducing a 2016 review of the evidence on heating controls, such as timers, room thermostats and programmable thermostats, the UK government notes that their performance is hard to determine because of how people use them, and that in some cases they could lead to higher energy consumption.

Equipment matters too. ENERGY STAR says homes with variable-capacity heat pumps generally do best with the thermostat their manufacturer recommends. And the thermostat itself uses power: the ENERGY STAR criteria allow up to 3.0 W on average in network standby.

Do smart plugs save electricity?

A smart plug is a switch with a radio. To listen for commands it stays powered all the time, even when the appliance behind it is off. Datasheets give the order of magnitude: one maker’s Thread plug lists under 0.5 W in standby, another maker’s Wi-Fi plug lists under 1 W. A plug drawing 1 W all year uses about 8.8 kWh (1 W for 8,760 hours); multiply by the price per kWh on your bill to see the cost.

Compare that with what it switches off. In the EU, the appliances covered by the standby rules, such as microwave ovens and audio equipment, have not been allowed to use more than 0.5 W in standby or off mode since 2013, with a slightly higher allowance when they show a status display. TVs fall under a separate regulation that also limits their power in standby and off mode. Cutting a recent TV or microwave at the socket with a plug that draws as much or more saves nothing.

Plugs pay off in other cases:

Things left fully on. A fan, a lamp, string lights or an old amplifier running long after anyone needs it.
Networked standby. The European Commission names TV decoders, printers, game consoles and modems as devices that use more power while staying connected in standby. From 2027 their limit is 2 to 7 W depending on the product, so one that sits connected all day but is rarely used can be worth switching off at night.
Finding the waste. Plugs with an energy meter show what a device uses when on and when idle. Moving one around the house, a week per appliance, finds the ones worth acting on.

Some things are not for a plug schedule: the fridge and freezer, which have to run to keep food cold; the router, which the other connected devices need to stay online; the boiler, which its own thermostat should control. Heaters need care: heater manuals often warn against any timer or remote control that switches the heater on automatically, because a covered heater is a fire risk. Read the appliance’s manual before putting it on a schedule.

What should you check before buying?

For a thermostat:

Compatibility with your boiler, heat pump or air conditioning; if in doubt, ask an installer.
Local operation. The schedule should keep running if the internet or the maker’s service goes down; the smart home guide explains why local control matters.
In the US, the ENERGY STAR label, which ties the savings claim to field data. Certified models also work with utility demand response programs, where the utility briefly adjusts the setting at times of peak demand.

For a plug:

Standby power on the datasheet. If it is not stated, you cannot compare it with the appliance.
Maximum load against the rating plate of the appliance you plan to connect.
An energy meter, if you want to measure before you automate.
The radio. Wi-Fi plugs need no hub; Zigbee plugs need one and Thread plugs need a border router, often built into a smart speaker, hub or display. The Matter over Thread vs Wi-Fi guide covers the trade-off.

How can you tell whether it saved money?

Compare like with like. One month’s heating bill says little, because the weather moves it more than any device does; compare the same months across years. If your home has a smart meter, your supplier may give you more detailed consumption data than the bill does, which makes a before-and-after comparison easier. A plug with an energy meter reports kWh directly.

Then divide the purchase price by the yearly saving to get the years it takes to pay back, keeping in mind that a connected device can lose its app or its updates before then. A thermostat that changes your habits can earn its price; a plug on a device that already sleeps at half a watt will not.

Where to go next

The smart home, explained covers hubs, radios and local control.
Matter over Thread vs Wi-Fi helps choose how plugs and thermostats connect.
IoT in energy goes deeper into smart meters, demand response and the grid side of home energy.
Fixed or variable energy price explains how to compare two offers on their full yearly cost and how to switch supplier.

Topics: smart home, energy, smart thermostat, smart plug, standby power, everyday questions