The Value of ROI Visibility (and the Nest thermostat)

Posted by mitch on February 22, 2012

I keep getting asked the question, “Does the Nest thermostat save you money?”

I can only blush and say, “I don’t know.”

Isn’t that a bit silly? I have a “Thermostat 2.0” and I don’t know the answer to this question.

Sure, it’s been a warm winter. But that’s not really the point.

My guess is that the Nest replaces two very simple types of thermostats: Programmable thermostats that had very simple schedules and thermostats with little to no schedule. What I’d really like is a way to put in my old thermostat program into the Nest web interface and have it show me the delta energy-hours saved (or not) for auto-away, the learned schedule, and remote adjustments. I almost never touched my old thermostat, but the schedule the Nest has learned is extremely non-trivial. Being able to understand the difference of how much the furnace would have run with the old schedule vs the new schedule would be very useful. Dollars saved (or burned) could be modeled by asking for the estimated energy price for the furnace per month (last month my furnace operation cost me about $170).

ROI modeling is complex and it can be hard to work up a model that feels legitimate. But I think for Nest, it could be done easily. If Nest had an API exposed, it would be easy for a third party to build some ROI tools as well.

When ROI can be easily expressed, the vendor can benefit from excited users talking about their ROI. But for now, I just have to say, “it’s a cool thermostat” when people ask me if it’s saving me money.

If you’re providing a tool or service, work with your customers to see if you can improve your ROI models. It’s an iterative process, but if you can nail it, you’re that much closer on your next deal. Would-be customers of Nest who ask me about the ROI story aren’t getting a good answer.

(Yes, the Nest includes some data on saving energy, but I really want to know how it compares to what my old thermostat would have done. And I want to see that energy saving data shown on the device itself on the web site and iPad apps. Those are my primary interfaces to the Nest, not the thing on the wall.)

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