Smart homes are no longer seen as a luxury; they’re not just about comfort and convenience anymore! From thermostats to EV chargers, connected devices are shaping how and when electricity is used.

Smart homes and the IoT industry are now becoming a key area for investors to watch, as today’s rapid advances in IoT and AI ripple through the grid, influence utility strategies, and shape the future of energy.

How Do Smart Homes Affect Energy Demand? (Quick Answer!)

Smart Thermostats: Cutting Bills and Shaping Demand

With smart thermostats, people can effectively reduce heating and cooling costs by 10-15%. When a large number of these devices work together at scale in many homes and buildings, they can shift load patterns and help utilities balance peaks.

Smart Plugs and Energy Monitors: Small Devices Big Impact

People can now easily access their energy use in real-time, which makes it easier to spot appliances that waste too much energy and switch them off during high-cost hours. It may not seem like a big thing individually, but at scale, the difference it makes in shaping daily load curves is evident.

EV Chargers: A New Type of Household Load

According to the International Energy Agency (IEA), EV adoption is on the rise, with over 1.5 million sold in 2023 alone. Smart technology helps with shifting demand off-peak and supports renewable integration. This is while unmanaged charging strains local grids and puts a heavy load on them.

Why Investors Should Care

The ability of smart devices to control energy use and the load flexibility they provide can reduce volatility in pricing, while poor coordination can trigger spikes.

Poor coordination means lots of devices pull power at the same time, which causes spikes in demand and results in energy prices going up.

Both scenarios directly influence electricity and natural gas futures, making IoT adoption an emerging market signal.

Smart Thermostats and Their Market Impact

How Smart Thermostats Reduce Energy Demand

Smart thermostats are able to learn user behavior using their AI features, which helps them optimize heating and cooling, and there’s proof that these devices work. Energy.gov says smart thermostats can reduce energy bills by 10-15%.

Looking at the big picture, not just one home, this can lower the overall energy use across the whole electricity network, which helps the grid manage demand more efficiently and save customers money.

Synchronization Risks and Morning Spikes

According to research by Cornell University, when thousands of thermostats follow the same schedules, they can create synchronized peaks, which clearly isn’t intentional, but still a big deal!

The research reveals that in New York, winter data showed a sharp 6:05 AM spike when heat systems were activated at the same time. These spikes often happen before solar panels start producing electricity, which forces utilities to rely on fossil-fuel plants.

How Utilities Are Managing It

In order to avoid too many devices running at once, utilities use something called demand response (DR) programs that adjust thermostats in small increments or stagger start times.

With randomized schedules and events led by utilities, thousands of thermostats can act like a “virtual power plant”. The result? Well, a more stable grid and a reduction of the need for expensive backup power plants.

Smart Plugs, Appliances, and Home Energy MonitoringHow Households Use These Devices

Using smart plugs and home energy monitors like Sense or Emporia, users can see how much electricity their devices are consuming in real time. They help identify “phantom loads”, which can make up to 10% of a home’s electricity use (NRDC).

Real Load-Shifting Examples

In 2025, many devices come with delay-start functions. This allows users to schedule their dishwasher, washer, or dryer for off-peak hours, which results in less pressure on the grid during evening peaks.

Market Implications

Individually, these appliances and plugs don’t mean much, but the effect they create multiplies across millions of households. When coordinated, these devices smooth out peak demand. In addition, when these devices work together in a planned way, this can lead to the reduction of the need for utilities to buy natural gas during critical hours.

What does this mean for investors? Well, it translates to more predictable daily load curves and less exposure to extreme short-term price volatility.

The Rise of EV Chargers and Vehicle-to-Grid Potential

EV adoption and its Energy Demand

Electric vehicles are one of the fastest-growing household loads. Only in 2023, more than 1.5 million EVs were sold in the US, according to the IEA. Individually, an EV takes up to 12 kWh of daily demand.

Unmanaged charging, especially in the evening, can fully drain a neighborhood substation. RMI projects that by 2035, several New York substations could be overloaded by 100-200% caused by EV charging alone (RMI).

Smart Charging and Managed Load Benefits

Utilities are utilizing smart charging programs that delay or stagger to off-peak hours. According to research, with managed charging, they are able to reduce system costs of EV integration by 38-62% (National Renewable Energy Lab).

Now, what does this mean for the household? That’s right, lower electricity bills under time-of-use rates.

EVs as Virtual Power Plants

There are even more advanced programs that don’t stop there; they use something called vehicle-to-grid (V2G) technology. With this technology, EVs actually work as distributed batteries, sending unused energy back to the grid.

This tech, when aggregated across thousands of vehicles, creates a flexible resource that helps stabilize renewables like wind and solar while generating new revenue streams for both utilities and EV owners.

When to Watch This Trend

As you’re reading this article, over 40 million US households already own smart thermostats or energy devices. Therefore, the influence of smart home technology on energy demand is already taking place. Utilities are already adapting pricing models and grid strategies.

Here are some key moments for investors to watch:

• Earning calls from major utilities (like Duke Energy or Dominion Energy) that reference demand-shaping programs.

• Policy developments, if you read about state support for EV chargers or federal funding for smart grids, then there’s going to be growth in the energy market.

• Seasonal demand shifts, this means in winter and summer, when the weather reaches an extreme level of heat or cold, IoT devices amplify peak-load management.

These signals have a direct impact on electricity futures, natural gas demand, and even oil markets as EV adoption gets bigger.

Conclusion

Smart home devices are gradually becoming a big player when it comes to shaping US energy demand. The devices mentioned in this article, like smart thermostats, smart meters, and EV chargers, alongside many more, are shifting how and when electricity is consumed.

For those who have an eye on the energy market, this trend is more than a convenience; it’s a structural change that will have an impact on utility earnings, grid investments, and commodity pricing over the next decade.

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Contact Person: Erfan Askari
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City: New York
Country: United States
Website: https://smarthomescope.com