Nest pushes further into energy business with SolarCity partnership and a feature called Time of Savings that tweaks thermostat settings based on utility prices
Energy companies are beginning … Mariella Moon / Engadget : Nest can slash people's energy use during peak prices Chris Mooney / Washington Post : This tiny change to Nest thermostats could have big energy consequences Stephen Hall / 9to5Google : Alphabet-owned Nest is partnering with Solar City to keep your ‘Time of Use’ electric bill down Michael Brown / TechHive : Nest thermostats to save some homeowners money by leveraging utility companies' Time of Use rate plans
Context & Ripple Effects
Nest has been assembling the pieces for an energy business for over a year: its studies claiming the thermostat pays for itself in two years framed the device as an investment rather than a gadget, and last month it widened its reach with integrations across August, LIFX, Belkin WeMo, SkyBell and others. The SolarCity partnership plus Time of Savings is the step where those threads converge into a revenue-relevant service.
The mechanism matters more than the branding: by letting the thermostat respond to utility time-of-use rates, Nest turns a consumer purchase into infrastructure a utility can program against — and gives Alphabet-owned Nest a second business line beyond hardware.
First-order effects
- Homeowners on time-of-use rate plans get automatic bill reductions as their thermostats pre-cool or coast around peak prices, with no behavior change required.
- SolarCity gains a differentiated bundle — solar plus price-aware climate control — while Nest gets access to SolarCity's installed-base channel instead of relying solely on retail shelf sales.
Second-order effects
- Utilities gain a demand-shaping tool they don't have to subsidize device-by-device themselves, strengthening the case for expanding time-of-use plans that only work well when homes have responsive hardware.
- Competing thermostat makers are pushed to match price-responsive features or cede the utility-partnership channel to Nest, since flat-rate homes have no reason to automate at all.
Third-order effects
- If energy services keep accruing to the device rather than the sale, thermostat economics invert toward subsidized or free hardware funded by the savings stream — consistent with Nest's later moves toward a cheaper sub-$200 thermostat and donated units through its Power Project.
- The longer arc points at homes becoming dispatchable grid assets, with whoever controls the thermostat software — here Google's Nest — holding the interface between millions of households and utility pricing signals.
The trend: Smart-home hardware is shifting from one-time gadget sales to utility-integrated energy services, with device makers like Nest monetizing the gap between peak and off-peak power prices.