How Much Does a Smart Home Cost?

I’ll be totally honest. I can’t tell you exactly what a smart home would cost you. There are simply too many variables. What I can do is break down the process and identify some of the elements that will ultimately determine the cost of your project. This will give you a better sense of the type of smart home you may want to pursue.

I think it’s important to distinguish a home automation system from the many DIY options available that allow you to control certain aspects of your home and make it “smart.” There are plenty of smart thermostats, smart lights, and home security systems that allow you to achieve a certain level of sophistication and energy efficiency. Those might be a better fit for you if you’re not seeking a fully integrated system. You may be in business with a Nest thermostat, which costs $250, Philips Hue lighting, which runs anywhere from $150-$170 for a single room starter kit, and a security system controlled by an app, which would have an initial installation fee, followed by standard monthly fees.

What you’ll want to consider when going this route, however, is that a wireless system that is created piecemeal is more susceptible to security breaches and can be more cumbersome to control and maintain via separate apps. The upside is that, should you decide to move, your system can move with you.

Then there is a home automation system, or smart home.

Control4 Remote Control

If you choose to go this route, your system will be hardwired and controlled from a central hub. You can’t take it with you if you move, but it will increase the value of your home should you decide to sell. It is this type of smart home that I’ll dissect.

So let’s take a look at where your costs will come from. We can break it down into a few key areas: equipment, engineering, and installation. Maintenance of your system should certainly be factored in as part of the expense, but I will address that in a future post. For now let’s focus on the initial installation of your system.


A smart home generally consists of lighting, comfort, security, networking, and entertainment. All of these will require equipment. A per room estimate doesn’t make sense here because some devices will service only one room (i.e. light switches), while others will control several rooms or even the entire house, like the central processor or thermostat. In a future post I will run some side by side comparisons of products currently on the market, but a good place to start would be to research, for instance, a basic thermostat against a smart thermostat to get a feel for the scale of the price increase when you move into smarter technology. To get entry level smart equipment into your home, such as a few light switches, a thermostat, and a basic processor, $1800 would be an expected starting price.


Think of the engineering of your system as you would a custom car. Someone has to design a unique item, made to your specifications, and ensure that all the parts will work together properly when you drive away. Everything hinges on this vital step. The engineer ensures all components talk to each other and function seamlessly. A smaller scale job may only require an hour of engineering, but a larger, more complex system might need 10 to 15. You can reasonably expect the price per hour to be in the area of $100-130.


The installation process requires several certified technicians to complete. You can generally expect the hourly rate for skilled labor to be anywhere from $60 to $100 per hour, per installer. Depending on the size and scope of your project, the installation can happen in a matter of days, but it will likely take several weeks for a system that controls every room of your house.

Pro Tip: If you’re undecided on making your entire home “smart,” you can have your installer pre-wire your whole home at the outset so that you can easily add on to your system at a later date.

I may not be able to tell you exactly how much a smart home will cost, but hopefully this break down has helped you understand what goes into the expense and will help you make a more informed decision for your home.

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About the Author

Steve Nicola is the founder & President/CEO at Smart Systems. He is responsible for setting goals and defining strategies that help to grow our company. He lives in Chattanooga with his wife of 28 years and their 3 girls.

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