Smart Thermostat Maker Nest Labs Cozies Up with Utility

Utilities, which have sometimes struggled to encourage consumers to be more energy efficient, may have found a handy new tool in Nest Labs.

The smart thermostat maker said yesterday it has been working “behind the scenes” with Reliant, a Texas-based retail energy provider that will offer a Nest thermostat to customers who sign on for a two-year contract.

The deal gives Nest Labs, which was founded by former successful Apple executives, another channel for selling its $249 Learning Thermostat. Because of their convenience to consumers, smart thermostats may become a more popular product for utilities looking to lighten the load on the grid at peak times.

Nest Labs Learning Thermostat has attracted rave reviews for being easy to use and its attractive design. Whereas most people don’t create a schedule for programmable thermostats, nearly all Nest customers so far have programmed their thermostats. Rather than having to manually enter in settings, consumers set the temperature by turning the dial and within a few days, the Learning Thermostat creates a schedule.

The fact that Nest customers actually program their thermostats—along with the product’s popularity—attracted Reliant to the Silicon Valley startup. “Cooling accounts for about 60 to 70 percent of the average home’s electricity bill, and with the Texas summer heating up, this plan couldn’t come at a better time,” Elizabeth Killinger, Reliant’s senior vice president of residential and operations, said in a statement.

Nest thermostats have an energy-saving feature called AirWave that turns off the air conditioner compressor but keeps the fans blowing, which works well in dry climates. The device is also equipped with an occupancy sensor so it can adjust the setting to cut down on wasted energy when no one is home.

In addition to lower energy bills, one of the most appreciated consumer features of smart thermostats is the ability to remotely control settings, letting people pre-cool a home or override a setting from a smart phone or computer.

Utilities in a number of states have incentives to improve customers’ energy efficiency, but cutting back on peak-time demand is particularly important on very hot days when the grid is maxed out by the higher air-conditioning load. In this regard, smart thermostats could play a bigger role by cutting back on wasted energy.

In many places, consumers can sign on to demand response programs where the utility will temporarily raise the temperature setting on air-conditioner thermostats to lower power consumption at peak times. Although the Nest Learning Thermostat doesn’t have the feature built in, its software can be updated over the Internet so it could be used as part of utility demand response programs as well.