How Much Does it Cost to Make a Smart Home

As we continue to build and renovate homes it is an inevitability that these homes will implement more and more technology in them. This can be lead from us as a consumer to have a nicer space to inhabit with warm, welcoming lighting, pleasant multiroom music, and convenience functionality such as automated blinds. Or, more and more common is market pressure to improve the efficiency and wellbeing of a home, such as zoned heating systems, heat pumps over conventional boilers, ventilation & heat recovery systems and much more.

Through 2022 and onwards demand has been huge for solar PV, renewable heating, and energy management systems due to worldwide increase in energy costs.

A big misconception is that these newer technologies are ‘efficient’ out of the box. While that may be true in laboratory testing the real world is a bit of a mixed bag, with multiple different technologies conflicting with each other. As well as the biggest unknown, a human being interacting with things they may not always understand.

For us smart homes and home automation answers the big question – how do we make sure all these technologies talk to each other, and are as easy as possible to use without constantly screaming for attention.

internet of things vs. professionally installed smart home systems

The Difference Between IOT & Professional Smart Homes

For many of us our knowledge of smart homes and home automation will be solely within the IOT (Internet of Things) category. These are the do it yourself products you can purchase from many retailers, from smart bulbs, smart thermostats, door locks and more.

However there is also a deeper world of professionally designed, installed, and commissioned smart homes that many will overlook due to the belief that these will be more expensive than off the shelf products, or lock you in to certain manufacturers or installers.

In this guide we will look at what each option offers, as well as the cost to benefit ratio for each.

When we started writing this blog we wanted to provide an unbiased look at the options to a consumer and demystify the prices and levels available, as it turns out this was a hard job. Mostly in part due to the complete lack of standardisation and regulation in this industry. However we do truly feel that smart homes are the future, and especially so after the research, just how important having a smart home installed by a professional is.

Low End SpecMid Level SpecHigh End Spec
IOT - One Room Lighting & Heating£268.97
£428.95£736.74
Pro - One Room Lighting & Heating£1,192.80£1,197.60£2,106.80
IOT - Whole House Lighting, Heating & Security£1,428.08£2,259.92£5,062.61
Pro - Whole House Lighting, Heating & Security£5,733.20£7,500£12,068
IOT - Music System With Ceiling Speakers (1 Room Addon)£330£980£1,400
Pro - Music System With Ceiling Speakers (1 Room Addon)£1,408.40£1,408.40£1,750

Prices calculated 12/2022. IOT prices only show hardware cost, whereas Pro prices include labour cost as well. Whole house prices based on a typical 3 bedroom 90sqm UK house.

As you can see from the above, the prices for various systems at various levels of specification can vary wildly. On first glance it would seem like the obvious answer would always be IOT due to the sheer price difference of all levels. So let’s break it down a bit more.

All Spec Options

All spec options were based on ‘typical’ functions that we would expect a family of four to look to have. This means a smart lighting control system with around 50 light fittings, with most rooms a single circuit, with two circuits in the kitchen. There is a mixture between simple white lights and colour changing on all specs as we found that colour changing lighting wasn’t directly related to price level (in fact many of the more expensive options were white only, as good white light is expensive to achieve).

 A smart heating system, with a single thermostat in the One room and Low End Specs, with the Mid End spec having multi-zone, and the High End spec having individual radiator control.

All spec options also include smart light switches for control. These have been picked based on simple style for each spec level.

IOT - Low End Spec

For the lighting, we went with one of the cheapest GU10 smart bulbs we could find a multipack for that claimed to have integration with Google which is the smart hub we elected for. To be honest we have never personally experienced these fittings, and they could be great. From the perspective of personal experience I would be somewhat wary and certainly wouldn’t offer these to clients as an installed service.

I would imagine the ‘smart’ side of them i.e. pairing to the Tuya app and using it is likely good and fairly reliable. They also boast 4.3 stars on Amazon. However after a decade of experience in the industry I would have a few concerns.

Namely, these don’t require a hub to work, this means that they are WiFi devices and will connect to your home router. For a single room with maybe 8 lights (so our single room option) this will be absolutely fine, and I imagine what 90% of the Amazon reviews have used them for. However, expand that to a whole house with 50+ fittings and that is a lot of WiFi use from a ISP provided router. I would expect at this point to have lots of WiFi drop out for these bulbs and also for any other devices such as mobile phones you have at home.

Next, these are RGB (Red, Green, Blue) lights, and for colours they will probably be quite good, but this does mean there is no ‘true’ white to them. So for all the purposes you need white lighting (probably 80% of the use of a room) whether it is for reading, working, watching TV, you will have fake white where all three colours are mixed. Trust us when we say that this is horrible, it is very noticeable, looks nasty, you can pick out the colours on shadowing of the walls, and worst of all it frequently causes headaches in people.

This was the overriding find we had for most colour changing light options was the lack of true white. This can usually be seen as the light will be sold as RGBW (Red, Green, Blue, White).

Finally, they boast a brightness of 350 lumens, this is an OK lumens level, but from professional experience we would say that a task oriented room such as a kitchen or living room would want a downlight to be in the region of 405 lumens.

For light switches we went with a simple Sonoff smart switch. This is the perfect ‘cheap’ smart switch option as it again doesn’t need a hub. The switch will only have the ability to turn our lights on and off, with any ‘mood’ changes being done through an app or voice. The biggest drawback of this option is again it is WiFi, if we assume that we have around 12 switches in an average house then with the lighting we would be at 62 WiFi devices, further causing us connectivity problems.

For heating we went nice and simple with a Hive thermostat and hub. Again for a cheap retrofit heating controller this is a good choice and most electricians could have it installed for you in less than an hour. The biggest drawback to this is that aside from an app to control your heating remotely, it really doesn’t do anything beyond a normal thermostat.

Finally, for a controller or hub we went with a Google Nest Mini as it is a nice cheap voice control system that does exactly what it says on the tin.

Important: All of the heating and lighting options here will require working on electrical circuits in your house. Our price table does not include labour for the IOT options as theoretically all of the above could be carried out without the need to certify your electrical works. However it would still need a high degree of competency, and should absolutely not be carried out by a lay person. If you take this into account I would expect to add somewhere in the region of £250 – £350 for the one room option and up somewhere between £1,500 – £2,500 for the whole house. Remember when you hire an electrician to fit products you have purchased then you are paying them for taking a level of responsibility they will work and not just their time to fit them. don’t be surprised if you have to ask several electricians before you find one who will agree to fit especially cheap products you have sourced yourself.

IOT - Mid Spec

For the lighting we upgraded to Philips Hue spots throughout. These overcome the WiFi issue as they are Bluetooth and pair to the Philips Hub instead, also having seen these personally they do seem to be a high quality fitting.

However the downsides are for the most part only white lighting, maybe with the option for colour changing in one room. Also while true white they do have a fairly low CRI (colour rendering index) meaning the replication of the white light is not highly accurate, this leads to the ‘artificial’ feel you may have experienced with certain lights, it is especially noticeable from fluorescent lights and you have probably experienced it the most in places like hospitals.

The biggest issue however with this lighting option, is that there is a limit of 50 devices on a Hue hub, with the switches we have 62. This means not only do we need a second hub, but as far as the app goes for us to control the house it appears as two houses and we always need to swap between the two.

For light switches we have used the Hue ones, these give dimming control at the wall so a big upgrade on the budget option, mood control is still through app or voice however.

For heating we have upgraded to Google Nest. This will allow us greater integration options with the wider Google network and hub. However, a huge consideration is that Nest’s biggest USP is that it is the ‘learning’ thermostat and is therefore more efficient as it learns the usage of the house. This feature however is disabled when you have multi-zone, so in this spec where we have a thermostat upstairs and one downstairs we have the same drawback as with Hive, it really is just a thermostat.

Important: All of the heating and lighting options here will again more than likely require installation by a professional electrician, with the price of labour being the same as the section above.

IOT - High Spec

For the lighting system we have now moved on to Lutron RA2 Select. This is arguably a borderline professional option, and is in fact chosen and recommended by electricians the world over due to its reliability and design. It falls more into the category of lighting control, offering simple control and interface of multiple lighting circuits within a room, with mood options available on the switch.

For downsides, it is (in our spec) for controlling conventional lighting, so don’t expect colour changing or individual control of fittings. However this does mean the option of choosing great quality fittings (we have gone for a £15 per fitting budget which would allow for a mid range quality light)

light switches are also Lutron RA2, which have more functionality than the other smart switch options on this blog. However, in our opinion for the price these do look quite ‘cheap’ and ‘plastic’.

For the heating we have gone for Honeywell Evohome, this provides radiator by radiator control for the first true zoned heating system on this blog. This means a nice cool bedroom, warm living room, and not wasting money heating rooms you don’t use. The big downside here however is that the smart TRVs do make noise, and this can sometimes be quite loud at night time.

Important: In this option it is probably more important than ever to include the cost of a professional to install for you as well.

Pro Specs

For all of our Pro specs we have chosen Loxone as the system of choice. This is because we have years of experience with both installing it and living with it, and we believe pound for pound it is the best performing and most reliable smart home on the market.

You may see other brands such as Control4, ELAN, Crestron, Savant, KNX, and more. These are all very good options, however we tend to find that they have a greater focus on home media than on building management and control, and they tend to be between 30 and 70% more expensive for a comparable system than Loxone.

First things first with Loxone, that green box you can see on the images above is the central controller for your home. Unlike all of the IOT options above your system is not reliant on the internet, and no personal data is sent to the cloud. This is a huge benefit as on our IOT options if your WiFi or internet goes down so does your home.

For the low end spec, we don’t have any colour changing lighting with Loxone, only control of conventional lights with on off control. For the mid spec we are still controlling conventional lights, but this time with 4x circuits having dimming control for key rooms like the kitchen and living room.

On the high end spec we have full colour changing and dimmed lighting throughout, this time with true white as well as colour. We also have a higher lumen count at 525 lumens, meaning the option for greater brightness control, and the possibility of reducing the number of fittings per room.

For the heating, we match a single thermostat and dual thermostat option found in the IOT specs. On the high end option we have full control again, with a TRV on each radiator. The added beauty of Loxone for heating however is that their learning system is designed to work as a fully zoned system so we have the best mix of efficiency with comfort.

On the high end spec here we also have automated lighting through the house with the use of sensors, this will turn our favourite lights on when we walk into the room, changing them depending on the time of day.

Finally, these same sensors can also give us a smart intruder alarm system without the need for additional hardware. All in all we could be looking to deliver as many as 60 different smart features from this hardware, compared to 10 or 11 from our IOT options.

For downsides of a professional system, this is obviously cost, sitting at around threefold for all options. So initial investment is much greater, however do take into account that these costs do include labour and that a professional smart home can easily last for 20 to 25 years vs. as little as 18 months for an IOT smart home

Time - Cost - Quality

Time Cost Quality

In our dream world we would have everything we want quickly, it would last forever, and it would be cheap. Unfortunately in the real world we have to make sacrifices, and this is just as true for a smart home as it is for anything else.

Speed:

  •  An IOT smart home will take you a LONG time to configure, set up, and get to a state where the whole family can use it. For reference it took us close to a day to get a handful of smart appliances and TVs set up at an office building recently, and we have experience with this.
  • The higher the quality you want from your IOT system the longer it will take, as you will have to spend a greater amount of time researching and evaluating products before making a purchase.
  • a Professional system will take you almost no time at all, as you are paying someone else for their expertise. You will be involved in decision making, and provide feedback to what you would like. Ultimately though all install and set up isn’t your worry.
Quality:
  •  For IOT this can be a complete potluck. You should break quality down into reliability i.e. will this work without issues such as dropouts and disconnects, and longevity i.e. if I install this will it last for a long time.
  • Any IOT product that uses any wireless technology can suffer from reliability issues.
  • IOT products have historically suffered for lack of longevity, the components used in them could have a designed life span as low as 18 months, and many IOT manufacturers are in business for less than 3 years.
  • For Professional systems the reliability is mainly dictated by the skill of your chosen installer. Ask for references, get a feel for them, and most importantly can they easily explain what they do without going too technical.
  • Professional systems are usually manufactured with a long longevity in mind, as they don’t make money from subscriptions and services; this is part of the reason they cost more. A lifespan of 20 years+ should be achievable.
Cost:
  •  The Price of a system both IOT and Professional can be heavily dictated by you and your choices, in terms of aesthetics and features. It could be entirely possible to double or triple our high end budget for both options.
  • Typically IOT will have a much lower initial cost. Professional systems will generally cost more initially.
  • With an IOT system you may have to budget to replace products every few years, and in the worst case perhaps a whole system if a company goes out of business.
  • For a Professional system you should budget for a yearly maintenance and service visit to ensure your system does last the stated 20 years, however beyond this there should be little to no additional cost.

Conclusion

Hopefully this article has helped to break down not just how much different smart homes can cost, but also the differences between them.

Where does IOT work? Well we think that if you are going for a small single room solution, for example a couple of smart lights and a voice assistant, then really IOT wins. It will be reliable enough for your needs, an electrician can fit it as long as you are confident in setting it up yourself, and with such a small number of devices set up should be straightforward.

Where does professional work? The more systems, features and rooms you have, then the more your need increases for a professional option. Imagine you have a whole house worth of lighting, a zoned heating system, a ventilation system, an intruder alarm, and maybe some music. This house needs a professional system, anything IOT here will fall over, have blips, cut outs, and need regular replacement. Not to mention you will likely need a fully installed WiFI system in this home to make your IOT system work which could easily be the cost difference of going professional in the first place.

Ultimately both of these options are perfectly valid, and don’t need to be considered competing. It would be more accurate to say that they fill different needs and niches, and your consideration should be what am I doing in my house to decide which option I should go for.

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