The Contractor's Guide to the Smart Home

March 22, 2018
Spring 2018
A version of this article appears in the Spring 2018 issue of Home Energy Magazine.
Click here to read more articles about Energy Efficiency Programs

Do you own a smart home? Probably not. While hype around the smart home has been building for years, most homeowners are only just beginning to dip their toes into the water. Smart homes are still the unknown frontier in the home performance industry.

For contractors focused on improving the performance of homes, the latest flashy smart home device claiming to save energy may seem too good to be true. In fact, it may seem like a kick in the face to the decades-long efforts by the home performance industry to increase understanding among homeowners of the fundamental improvements necessary to make a home energy efficient. Customers may be willing to invest in a cool new smart thermostat, but not in the fundamentals of insulation or air sealing that would improve the comfort and carbon footprint of a home. This discrepancy between what customers want and the customary methods of making homes more efficient can create a rift between traditional home performance measures and smart home technology.

Seattle resident Nikki Mazzei researches energy efficient appliances with daughter, Billie. (Marcela Gara, Resource Media)

While smart homes and home performance may seem at odds, there is in fact opportunity for great synergy. As a contractor in a recent training in Connecticut told me, “There is no $200 fix to a $20,000 problem,” but if the $200 smart home product can help encourage homeowners to think about making home performance improvements, it certainly may be a worthwhile investment.

Smart home products may provide a tangible perspective into the often-unseen work done to improve a home’s performance by providing insight and/or control of energy-using elements. This could become the cherry on the sundae for contractors looking to ensure satisfied, repeat, and referral-ready customers. In some cases, the products may even help contractors to do their job better. But before exploring which products may benefit contractors, let’s see how smart devices save energy in the first place.

How (and Whether) Smart Products Save Energy

The savings mechanisms behind smart products are based on two common truths: (1) People are flawed, and (2) People have habits. Unlike the traditional effort to increase energy efficiency by replacing inefficient equipment with a more-efficient model, or by making a building tighter so the HVAC doesn’t need to work as hard to maintain the same temperature, smart devices that save energy optimize whatever equipment or building envelope already exists. A smart thermostat does not make your HVAC use less energy to produce hot or cold air. Rather, it uses a series of sensors and algorithms to run your HVAC less often and produce less conditioned air. Through intelligent controls, often based around occupancy or use sensing, truly smart devices should be able to pick up on the occupants’ patterns as well as their flaws and failures (forgetting to turn down the heat when you leave for the day, overriding the programming in a programmable thermostat, forgetting to set it to Vacation when you go on vacation) to reduce equipment run time. Energy Star has developed a qualified products list of smart thermostats that can show significant run-time reductions using field data; the thermostats on this list have been proven to save energy in the aggregate.

West Seattle homeowner Thomas Swenson adjusts his Nest Thermostat. (Marcela Gara, Resource Media)

Then there are water heaters. Most people don’t think about their water heater until there is a crisis. If a water heater is set at a higher-than-necessary temperature for daily use, smart controls that recommend more appropriate levels can save significant energy right off the bat. Those savings could of course be realized relatively easily by taking the time to manually check the temperature setting, but people are flawed and often don’t do this. (Be honest—have you set your water heater to the DOE-recommended 120°F?) Incorporating smarts and an app that enables you to set the water heater without a trip to the basement will help you to take that easy energy-saving step. Furthermore, smart water heaters have the potential to save energy in some households by tracking occupancy and water usage patterns. If a water heater knows that you are gone for a week, it could set back the temperature even further. If it knows that on Monday through Friday, you do not use water between 9 am and 5 pm, it can cancel some of the reheating it is programmed to do to be prepared for the 1 pm shower that you are not going to take. If your schedule is less reliable or you do not travel often, a smart water heater may not save you much energy, but even some basic signaling on time of day could help ensure that a smart water heater is not heating at the worst time for the grid, even if you don’t participate in a utility demand-response program.

For appliances that you use on demand (think cooking equipment or laundry), adding smart capabilities is unlikely to save any more energy than you could save by buying a very efficient nonsmart unit. If there is some flexibility to your use of this equipment, however, a smart unit can propose a more optimal time to run. For example, if you have solar panels and don’t care when during the day your electric dryer runs, as long as clothes are dry by 5 pm, having smart controls could ensure that you make the most of your distributed-energy resource.

For most other energy-consuming devices in your home, there may be base-load energy reductions that draw a small amount of electricity constantly. These include things like chargers, electronics that you think may be turned off or not in use, and lights left on. Smart devices that can track the occupancy of a home can completely power down outlets or smart devices by sending a single away signal to the home. The energy savings from these small but constant loads may be only a few dollars a month, but over the course of years, that can add up.

South Seattle homeowner Marissa Mei Esteban searches online for energy efficiency. (Marcela Gara, Resource Media)

Smart Home Products to Benefit a Contractor

Many smart home products offer direct and immediate benefits to the contractor. The following examples are taken from a recent Northeast Energy Efficiency Partnerships (NEEP) brief. Installing a smart thermostat after a whole-house retrofit can be a relatively inexpensive way to ensure maximum energy savings on future energy bills. This is especially true for homeowners who have some technological aptitude and a history of leaving their thermostat at a high setting. In this instance, the smart thermostat could remove the potential for human error, and ensure that the retrofit realizes the energy savings promised.

A smart indoor air quality (IAQ) monitor can provide quantitative evidence of home health improvements from a home performance upgrade. For customers who aren’t yet ready to commit to a full efficiency retrofit but do get an initial assessment, a smart IAQ monitor (under the supervision of a contractor) could sell them on a retrofit. If poor IAQ can be demonstrated, homeowners are more likely to invest in a home performance upgrade.

A smart lightbulb is a relatively inexpensive leave-behind for customers engaged in a range of work. While they may not show off their new duct sealing or high-efficiency furnace to visitors, they may show off their new smart lightbulb and its ability to color tune and dim. Their ability to pull up a smartphone app and control a new smart lightbulb may impress guests and provide an opportunity to highlight and discuss behind-the-scenes efficiency work.

Non-energy-related smart home devices can also benefit contractors as well as homeowners. Products such as smart door locks and doorbells allow homeowners to provide access to on-site workers when the occupants are not home. Contractors who offer other smart devices, such as cameras, garage door openers, blinds, appliances, plugs, speakers, or switches, could find customers willing to pay for a professional installation. See Table 1.


Approximate Range of Prices (Product Only)

Smart thermostats

$120–250, with several products on the Energy Star list ~$170.

Health and safety home monitors


Smart lighting

$12–70, wide range of functionality and hardware

Smart-home apps


Smart water-heating products


Load-monitoring hardware

$100–500, costs still coming down

Other smart-home devices

Widely variable

Putting the Smart Home to Work for You

With such a variety of available smart home devices, contractors really need to ask themselves a few questions:

  • What can the smart home do for me?
  • Am I looking to do ongoing engagement or subscription with my existing clients?
  • Do I want to augment the impact of a home retrofit?
  • Am I looking for a leave-behind that customers can use as a talking point for referrals?
  • Do I want to offer my clients a more complete home improvement experience—one that now includes smart home elements?

Incorporating smart home devices into contractor service offerings can help meet many different objectives. Many smart home products are relatively easy to install, but for the millions of homeowners with little patience or tech-savvy intuition, professional setup for a modest fee could be a very beneficial service. Leading smart-thermostat manufacturers Nest and ecobee offer contractor training and installer certification to take the guesswork out of the installation. They also list certified contractors online, a potential lead-generating benefit.

Some smart devices have specific features that allow contractors to access and monitor information to assist in diagnostics or predict potential problems. A few examples of these types of product include a smart thermostat with HVAC diagnostics, a home automation platform like Building36, an HVAC sensor such as Emerson’s Comfort Guard, or a smart IAQ monitor that sends an alert when it senses that the indoor air is degrading. Not only can this information improve contractor-customer relationships, but it can create a longer-term relationship.

Eric Krauss using an app to adjust the temperature of his house. (Marcela Gara, Resource Media)

Smart home devices, especially thermostats, are beginning to serve as data collection tools. Not only may they soon be able to provide preaudit information to help identify homes in need of retrofits, but they may also serve as an informed starting point for conversations about home efficiency work. A recent article in Home Energy (“The Evolution of Smart Home Performance and Its Benefits to the Grid,” HE online Fall ’17) states that utility demand-response programs may remove homes that cannot keep their temperature, when those homes should become targets for efficiency upgrades.

When working with utility efficiency programs, contractors may want to conduct a smart-energy assessment. This can be a systematic way for them to offer the same services across customers with their utility partners. This could mean coupling existing on-site visits and assessments to include installation and setup of smart hardware or software within the home. Another approach could be adding a smart-energy home overlay to an existing home assessment program, which might include a walk-through with the specific intention of identifying opportunities for smart products. These walk-throughs might look at things like home optimization based on load profile or identification of specific end uses, such as appliances or water-heating units, that could be replaced with an efficient and smart new product. Since not every home is compatible with every smart- home product, especially homes with older wiring or connectivity challenges, an informed contractor already on-site could make recommendations to help ensure success.

learn more

For the NEEP brief cited above, go to

Download a report from the HPC.

Get information on the Smart Homes track at HPC National.

For further details on smart-thermostat installer certification, go to Nest and Ecobee.

See more information about products on the Energy Star smart- thermostat list.

See additional smart-home products.

Contractor engagement with the smart home is not brand new, but it is still in its infancy. As Kara Saul Rinaldi, vice president of Government Affairs at the Home Performance Coalition puts it, “HPC has been working to advance smart home opportunities for contractors for years, because we know there are a multitude of benefits. HPC has advanced the residential smart- home technology policy at conferences for six years, including writing reports and articles, and advancing a Smart Home Track and Reception at our National Conference with the objective of educating and connecting contractors with the smart home information, products, and pilots that can help support their businesses.”

As smart home technologies move into the mainstream, customer interest is growing. Home energy contractors interfacing directly with homeowners are likely to find smart home questions coming up more frequently. Since smart home technology is typically less expensive and more interactive than other home efficiency improvements, there may be a natural fit to incorporate these products into contractor business offerings. When coupled with utility rebates or subscription-based monitoring, these technologies may integrate into a successful contractor business model. Contractors who begin to research, pilot, and get comfortable with smart home technologies today can cement their position as trusted partners for homeowners. And that is—well, smart.

Claire Miziolek the Technology & Market Solutions Senior Manager at Northeast Energy Efficiency Partnerships (NEEP). Her role is to help speed the adoption of efficiency solutions in the Northeast and Mid-Atlantic.

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