Smart Thermostat Market

Market Definition

The market encompasses devices that regulate indoor temperature through automated, sensor-based, and learning-based controls. These thermostats use Wi-Fi and machine learning to adjust heating or cooling based on user behavior, weather, and occupancy.

They are integrated into broader smart home systems and can be managed remotely through apps. Used in residential, commercial, and industrial settings, they help optimize energy use and improve comfort.

The report provides a comprehensive analysis of key drivers, emerging trends, and the competitive landscape expected to influence the market over the forecast period.

Smart Thermostat Market Overview

The global smart thermostat market size was valued at USD 4.67 billion in 2023 and is projected to grow from USD 5.48 billion in 2024 to USD 17.22 billion by 2031, exhibiting a CAGR of 17.76% during the forecast period.

Market growth is driven by the expansion of smart homes and IoT integration, which enhances the convenience and energy efficiency of climate control. Additionally, advancements in smart climate control technologies for commercial and hospitality spaces are fueling demand, offering better energy management and cost savings for businesses.

Major companies operating in the smart thermostat industry are Google LLC, ecobee Inc., Honeywell International Inc., Emerson Electric Co., Johnson Controls, Carrier, Siemens, Schneider Electric, Lennox International Inc., Trane Technologies plc, Daikin, Copeland LP, LG Electronics Inc., NETATMO, and tado GmbH.

Rising energy consumption concerns are prompting households and businesses to adopt smarter HVAC controls. Smart thermostats offer real-time monitoring, automated adjustments, and learning-based temperature control, reducing energy waste and utility costs.

Supportive regulations for energy-efficient appliances further boost adoption. As environmental standards tighten, demand for energy-efficient solutions continues to accelerate the growth of the market globally.

• In April 2024, Anacove launched the Anacove Smart Thermostat as part of its comprehensive energy management solution lineup. These smart thermostats are advanced IoT devices equipped with sensors to track temperature, humidity, air quality, and occupancy. Designed for seamless integration, they connect to hotel HVAC systems via existing Wi-Fi, enabling centralized control across the property.

Key Highlights:

1. The smart thermostat industry size was valued at USD 4.67 billion in 2023.
2. The market is projected to grow at a CAGR of 17.76% from 2024 to 2031.
3. North America held a market share of 33.24% in 2023, with a valuation of USD 1.55 billion.
4. The wireless segment garnered USD 2.92 billion in revenue in 2023.
5. The connected segment is expected to reach USD 6.90 billion by 2031.
6. The new installation segment secured the largest revenue share of 57.87% in 2023.
7. The commercial segment is estimated to register a robust CAGR of 17.89% through the forecast period.
8. Asia Pacific is anticipated to grow at a CAGR of 18.85% through the projection period.

Market Driver

"Expansion of Smart Homes and IoT Integration"

The increasing adoption of connected home technologies is influencing the mart thermostat market. These devices form a core part of smart home ecosystems by integrating seamlessly with IoT platforms such as Amazon Alexa, Google Assistant, and Apple HomeKit.

Consumers prefer the convenience of controlling home environments through voice or mobile applications. With the growing adoption of home automation, smart thermostats are increasingly integrated into residential projects to enhance comfort, efficiency, and user experience.

• In January 2025, ecobee introduced the Smart Thermostat Essential, a cost-effective model offering core comfort and convenience features, including a full-color touchscreen. Users can control heating and cooling remotely through the display or the ecobee mobile app. The device is easy to install and compatible with major smart home platforms such as Amazon Alexa, Apple HomeKit, and Google Assistant.

Market Challenge

"Compatibility and Integration Issues"

A significant challenge hindering the growth of the smart thermostat market is the compatibility and integration issues with existing HVAC systems and other smart home devices.  Older systems in many homes and businesses often do not support seamless integration, resulting in consumer reluctance.

To address this, key players are focusing on developing thermostats with wider compatibility across different HVAC brands and smart home platforms. They are also offering easy-to-install solutions, enabling seamless integration with minimal technical expertise. Additionally, some are providing extended support and updates to ensure smoother connections with older systems.

Market Trend

"Surging Adoption in Commercial and Hospitality Spaces"

The growing adoption of smart thermostats in commercial offices, hotels, and resorts is fueling market growth. Businesses are using these devices to reduce energy waste, improve guest comfort, and streamline facility operations, fueling the growth of the smart thermostat market.

In hospitality settings, smart thermostats help automate room temperature based on occupancy, which lowers operational costs while enhancing guest experience. Integration with building management systems allows centralized control, making them a valuable asset in energy-focused commercial strategies and large-scale property management.

• In August 2024, Copeland unveiled the Verdant VX4, a smart thermostat for commercial and multifamily properties. The VX4 offers advanced demand response features and reduces HVAC runtime through intelligent temperature setback in unoccupied rooms, while maintaining occupant comfort. Featuring a sleek, fingerprint-resistant design, it is available in North America and Europe, offering an energy-efficient solution aligned with dynamic occupancy patterns.

Smart Thermostat Market Report Snapshot

Segmentation	Details
By Connectivity	Wireless, Wired
By Product	Connected, Standalone, Learning
By Installation	New Installation, Retrofit
By End-Use	Residential, Commercial, Industrial
By Region	North America: U.S., Canada, Mexico
	Europe: France, UK, Spain, Germany, Italy, Russia, Rest of Europe
	Asia-Pacific: China, Japan, India, Australia, ASEAN, South Korea, Rest of Asia-Pacific
	Middle East & Africa: Turkey, U.A.E., Saudi Arabia, South Africa, Rest of Middle East & Africa
	South America: Brazil, Argentina, Rest of South America

Market Segmentation

• By Connectivity (Wireless and Wired): The wireless segment earned USD 2.92 billion in 2023 due to its ease of installation, remote control capabilities, and seamless integration with existing smart home ecosystems.
• By Product (Connected, Standalone, and Learning): The connected segment held a share of 40.47% in 2023, propelled by the growing consumer demand for seamless integration with smart home ecosystems, offering enhanced control, energy savings, and convenience through mobile apps and voice assistants.
• By Installation (New Installation and Retrofit): The new installation segment is projected to reach USD 9.96 billion by 2031, fueled by the growing demand for energy-efficient and automated climate control systems in newly constructed homes and buildings.
• By End-Use (Residential, Commercial, and Industrial): The commercial segment is set to grow at a CAGR of 17.89% through the forecast period, largely attributed to the growing demand for energy-efficient solutions that help businesses reduce operational costs and improve climate control across large-scale facilities.

Smart Thermostat Market Regional Analysis

Based on region, the market has been classified into North America, Europe, Asia Pacific, Middle East & Africa, and South America.

The North America smart thermostat market share stood at around 33.24% in 2023, valued at USD 1.55 billion. North America leads globally in the adoption of smart home technologies globally, with consumers increasingly integrating smart thermostats with broader home automation systems such as security cameras, lighting, and voice assistants. This ecosystem compatibility has made smart thermostats a standard feature in both new and upgraded homes.

Moreover, major smart thermostat manufacturers, including Google (Nest), ecobee, and Honeywell enhance product availability, innovation, and competition in the region. Their continuous investment in new features, improved app experiences, and broader ecosystem compatibility fosters regional market expansion.

• In August 2024, Google launched the fourth-generation Nest Thermostat alongside the Google TV Streamer and new AI-powered features aimed at enhancing Nest cameras, Google Home, and Assistant-enabled speakers. The updated thermostat introduces a redesigned Nest Temperature Sensor that helps manage uneven temperatures across the home. Users can connect up to six sensors for room-specific climate control.

Asia Pacific smart thermostat industry is poised for significant growth estimated to grow at a robust CAGR of 18.85% over the forecast period. The Asia Pacific region is experiencing fast-paced urban growthrapid urbanization, which is closely tied tosupported by smart city development, is boosting this notable expansion.

This focus on smart urban infrastructure is playing a major role in accelerating the growth of the market. Furthermore, smart thermostats that work with air quality sensors or include ventilation controls are gaining popularity, that is adding momentum to the growth of the market in Asia Pacific, especially in densely populated cities.

• In April 2023, 75F launched the HyperStat, a commercial-grade thermostat and humidistat equipped with eight integrated sensors for advanced indoor air quality monitoring and precise room-level temperature control.  This innovation supports the company's commitment to enabling commercial buildings to adopt advanced technologies that support energy efficiency and long-term sustainability.

Regulatory Frameworks

• In the U.S., smart thermostats must meet ENERGY STAR criteria set by the Environmental Protection Agency (EPA). These criteria focus on energy efficiency, user feedback, and integration with utility demand-response programs. In California, Title 24 of the state’s energy code further promotes the adoption of energy-efficient HVAC controls, increasing smart thermostat adoption.
• In the UK, Building Regulations Part L encourage energy-efficient building technologies, including smart thermostats. These regulations require heating systems to optimize energy use  across residential and commercial buildings.
• In China, the Energy Label (CEL) mandates that smart thermostats display an energy efficiency label, ranging from Class 1 to Class 5. This is part of the country's broader energy conservation efforts. Additionally, the Act on the Rational Use of Energy, managed by the National Development and Reform Commission, enforces energy efficiency standards for connected devices, including thermostats.
• South Korea’s Energy Efficiency Rating Labeling System, managed by MOTIE, requires smart thermostats to display energy efficiency ratings. The system enforces Minimum Energy Performance Standards (MEPS) to ensure products meet national energy efficiency targets. This regulation aims to reduce overall energy consumption and improve the environmental footprint of energy-using appliances.

Competitive Landscape

Companies operating in the smart thermostat industry are adopting strategies such as product line expansion expanding their product lines and forming joint ventures.

By broadening their range of products, companies can cater to a wider audience and meet diverse customer needs. Joint ventures allow for the sharing of resources and expertise, enabling quicker market entry and technological advancements.

• In January 2025, Resideo Technologies unveiled the Honeywell Home X2S smart thermostat at CES 2025. This model supports Matter and integrates with various smart home systems. It is compatible with Amazon Alexa, Google Home, and Apple Home, allowing users to adjust settings and schedules through the Resideo First Alert App. Additionally, the thermostat promotes indoor air quality (IAQ) awareness by monitoring humidity levels and providing reminders for air filter replacement, ensuring optimal performance of the heating and cooling system.

List of Key Companies in Smart Thermostat Market:

• Google LLC
• ecobee Inc.
• Honeywell International Inc.
• Emerson Electric Co.
• Johnson Controls
• Carrier
• Siemens
• Schneider Electric
• Lennox International Inc.
• Trane Technologies plc
• Daikin
• Copeland LP
• LG Electronics Inc.
• NETATMO
• tado GmbH

Recent Developments (Partnership/Product Launch)

• In June 2024, Geokey announced a new app integration with Resideo Technologies. Through this partnership, Honeywell Home smart thermostats by Resideo will be the exclusive thermostat option within Geokey’s mobile access control app.  This partnership enhances resident comfort management while providing building owners with tools to monitor energy consumption and improve efficiency.
• In March 2024, Panasonic partnered with tado, a prominent smart thermostat provider. The integration of Panasonic's A2W system with tado’s Smart Thermostats and Heat Pump Optimizer enables more efficient control over room temperature and hot water output. By analyzing factors such as indoor temperature, user preferences, weather conditions, and electricity pricing, the system can help reduce energy consumption by up to 20%.
• In February 2024, Carrier introduced the Carrier Smart Thermostat to offer affordable connectivity for both residential new construction builders and homeowners.  With a user-centric design, the thermostat supports various accessories, integrates with smart home systems, and offers an optional five-year warranty upon activation.