Saving Money or Losing it? Nest Faces Suit Over Energy-Saving Thermostat

Nest Labs Inc., one of Google’s most recent acquisitions, has been hit with a class action lawsuit over its “Learning Thermostat” – and it’s a lawsuit that claims the thermostat does the exact opposite of its intended use. According to a complaint filed in California federal court last week, Nest thermostats can actually increase energy bills, rather than reduce them, because the device’s screen heats up, leading to incorrect temperature readings and increased air conditioner use.

Darisse claims that the company is violating false advertising laws and customer warranties.

The suit was filed by plaintiff Justin Darisse, who purchased and installed the $250 thermostat after it was touted as “energy saving” by the company. According to Nest, the device is a learning thermostat that can remember users’ preferences, shut down when people aren’t in the building, and be controlled by a smartphone app. As their website explains, “The Nest thermostat learns your schedule and the temperatures you like. It keeps you comfortable and saves energy when you're away.” The site continues:

“[The thermostat] creates a personalized schedule based on the temperature changes you’ve made and continually adapts to your changing life. After you’ve left the house, the Nest Thermostat senses you've gone and automatically adjusts the temperature to avoid heating or cooling an empty home.”

Nest thermostats, however, are allegedly constructed in such a way that the screen itself can heat up and cause inaccurate sensor readings. The lawsuit claims that the device’s face, which displays the temperature and includes sensors that help it gauge whether to increase or decrease the room temperature, warms itself up - and that this defect increases energy users’ costs. The complaint says:

“Nest's base and faceplate heat up, which causes Nest's temperature reading to be from two to ten degrees higher than the actual ambient temperature in the surrounding room. This defect prevents the thermostat from working properly. As a result, Nest users do not experience the advertised energy savings.”

Darisse claims that the company is violating false advertising laws and customer warranties. The suit seeks to represent a class of “all persons in the United States who purchased Nest Thermostats for personal or household use, excluding those who purchased Nest Thermostats for resale.” It’s estimated that Nest sell over 100,000 Nest thermostats a month, making the size of the potential class membership pretty significant.

It’s an interesting problem, and one that – if true – will prove embarrassing for Google, who paid more than $3.2 billion for the company in January. It doesn’t appear to be an isolated problem, either – the complaint filed in California includes examples of consumer complaints that suggest the inaccurate readings may be surprisingly common. “Nest was consistently reading 2 degrees above my digital room thermometer,” one consumer wrote on the Nest Community Website, adding that “based on user comments it appears this is normal for Nest.” As far back as April 2013, one user wrote that “Nest reads at least 2 degrees warmer than the calibrated thermometers.”

So, trouble in paradise for Google’s shiny new toy? No doubt the company will argue that these are isolated incidents, but if people’s energy bills are being affected, you can bet there’ll be plenty of interested consumers keen to make sure they’re getting what they pay for. After all, $250 is pretty steep for a thermostat that only ends up costing you more than it saves.