Indiana: Smart thermostat pilot studies

A Cadmus study helped two Indiana utilities discover how smart thermostats save their customers money and energy

Northern Indiana Public Service Company (NIPSCO) and Vectren South (Vectren) provide energy delivery services to over 1.5 million natural gas and electricity customers throughout Indiana. From 2013 to 2014, NIPSCO and Vectren each designed, funded, and conducted smart thermostat pilot programs to residential customers who used manual thermostats in their homes. Under the programs, a total of 700 Nest smart thermostats and 700 standard programmable thermostats were installed in the homes of randomly selected NIPSCO and Vectren natural gas and electric (i.e., dual-fuel) customers who had previously undergone a home energy assessment. In addition to the new thermostats, customers received training on proper operation of their new thermostats. The programs’ goals were to help customers more easily manage their energy use, and to provide each utility with valuable and actionable data on the energy savings impact.

Challenge

Programmable thermostats, which give users the ability to program a schedule of set temperatures, have the potential to reduce energy use from the levels of conventional, manual thermostats. However, for several reasons, many studies show these savings often fail to live up to their promise. A new generation of Wi-Fi-enabled, smart thermostats designed with more user-friendly programming is thought to help eliminate the challenges presented by programmable thermostats—yet few comprehensive studies have attempted to quantify these savings in actual customer use.

If our utility partners wanted to understand the effect their smart and programmable thermostat programs had on customers’ energy use, they needed a team of EM&V experts to measure the programs’ impact. NIPSCO and Vectren hired Cadmus to evaluate the program and determine the energy savings from the Nest thermostat over manual thermostats and conventional programmable thermostats.

Solution

To help NIPSCO and Vectren understand whether, and how, customers with smart thermostats saved energy, Cadmus conducted a billing analysis of participants’ energy consumption both before and after the new thermostats were installed and compared the energy savings from the programmable thermostats. A control group of over 4,000 NIPSCO and Vectren customer households still using manual thermostats was used to determine adjusted gross savings from the Nest and programmable thermostats.

Our team also installed data loggers in 700 participating homes to track indoor air temperature and air conditioner runtime—the largest installation of this scale to date.

In addition, we conducted a tablet-based pre-installation survey to collect demographic information and a post-installation survey to assess participant behavior and determine any changes over the study period that might eliminate the participant from the analysis.

Results

Cadmus’ study found significant savings for the customers who had smart thermostats installed:

• NIPSCO
  • Participants with the Nest thermostat reduced their heating gas consumption by approximately 13.4 percent, compared to only 7.8 percent for participants with a programmable thermostat.
  • Nest thermostat users had, on average, a 16.1 percent reduction in electricity use for cooling.
• Vectren
  • Participants with the Nest thermostat reduced their heating gas consumption by approximately 12.5 percent, compared to only 5.0 percent for participants with a programmable thermostat.
  • Nest thermostat users had, on average, a 13.9 percent reduction in electricity use for cooling.

The results of the evaluation helped the utilities make program planning decisions, such as expanding their smart thermostat pilot programs and offering rebates to customers who purchase smart thermostats. The program also led to Vectren’s recognition by the Association of Energy Service Professionals (AESP) for Outstanding Achievement in Energy Services Market Research and Evaluation in 2015.

“The prestigious AESP award reflects the importance of the findings of our program and the quality of Cadmus’ evaluation service to validate them. We greatly appreciate their support and look forward to working together in the future.”
—Robbie Sears, vice president of customer energy solutions, Vectren