1. Home
  2. Home Electrification

Smart Home 101: Introduction and How It Works

The words "Smart Home 101" over an image of a futuristic-looking house, showing how to design and build a smart home system, the benefits and drawbacks of smart home technology, and how to create a smart home ecosystem that will save money.
PublishedDecember 9, 2022
UpdatedMay 7, 2024
AuthorCory O'Brien HeadshotCory O'BrienSenior Director - Growth MarketingEditorRyan Barnett HeadshotRyan BarnettSVP, Policy & New Market Development
In this article
Smart Home Definition
Benefits and Drawbacks of a Smart Home
Examples of Common Smart Home Devices
The Smart Home Hub
Creating a Smart Home
Keeping Your Smart Home Safe
The Dream of the Smart Home
A Smart Home Is A Smart Investment

Our world is rapidly advancing through technological developments that would make even the Jetsons jealous. According to Insider Intelligence, 142.0 million people, or 42.1% of the US population uses a voice assistant, and 149.8 million people, or 44.4% of the population uses a smart home device. It won’t be long before more than half of us are talking to ‘robots’, using artificial intelligence, and activating smart home devices to do things around the house!

Not only can smart home technology provide more convenience in your daily life, but it can also help you save money on your energy bill and live more sustainably. This smart home guide will tell you everything you need to know about how to design and build a smart home system and how you can start benefiting from the many advantages of upgrading to one.

See how much you can save with home energy changes

Step 01
Step 02
My electric bill is $290/mo

Smart Home Definition

A smart home is a system where household devices are connected via an online network and can be automated to perform certain tasks. The goal of a smart home is to help your household run more efficiently by syncing up and automating the operations of these connected devices.

Smart home devices can be anything from smart thermostats with specific schedules to kitchen appliances that turn on at a specific time to lights adjusting their brightness to the time of day.

You can program your connected appliances based on your preferences and the function you would like them to perform. Your smart devices then communicate with one another via bluetooth, your home’s Wi-Fi, or other wireless signals to ensure the work gets done.

What Is The Internet of Things?

When researching smart home setups, you may come across the term “Internet of Things”. Abbreviated as IoT, it’s a techie term for physical objects (“things”) that contain sensors, processors, software, and other technologies that allow them to connect together and exchange data with other devices over the internet or other communication networks.

Just like people use the internet to share data, network with one another, and communicate online, smart devices can use the Internet of Things for the same purposes.

Benefits and Drawbacks of a Smart Home

If you’re considering investing in smart home technology, it's wise to weigh the advantages and disadvantages of creating such a home before you begin the transition.

Smart Home Benefits

There are six core perks of turning your home into a smart home:

  1. Energy Efficiency
  2. Convenience
  3. Home Automation
  4. Home Security
  5. Save Money
  6. Increase Market Value

Energy Efficiency

Perhaps the most important benefit provided by most smart devices is that they can help you save energy and be more sustainable by working only when you need them. For example, advanced smart home lighting systems can be set up to function by using sensors that detect when you are in a room, and then turn off when the room is unoccupied.


Smart devices are often designed to be hands-free and intuitive without human intervention. It's hard to imagine anything more convenient than shades that draw themselves to keep a room cool during certain times of day, or appliances that turn on with a simple voice command.

Home Automation

After you have set up your preferences to make life more convenient, your connected smart home devices can communicate with one another to perform their functions. You are now free to kick back after a hard day of work, and let your home automatically adjust to your pre-set preferences.

Home Security

You can install anti-theft systems, cameras, and smart locks to ensure the safety of you and your family. Many of these devices include remote access and viewing so you can check on your house even when you aren’t there.

Save Money

Although the initial investment in a smart home automation system might feel significant depending on how many smart devices you purchase, it could definitely help you lower long-term costs. When your home uses energy more efficiently, you can enjoy decreased electricity bills and increased savings.

Increase Market Value

Investing in the technological functions of your home and building in smart home functionality could provide improved market value when compared to similar homes in your neighborhood.

Smart Home Drawbacks

There are four potential disadvantages to consider when you’re planning a smart home:

  1. Cybersecurity Concerns
  2. Internet-Dependence or Power-Dependence
  3. Installation Costs
  4. Learning Curve

Cybersecurity Concerns

While smart cameras and lock systems can increase your physical security, they can potentially make your private information vulnerable to malware or hacking. Just like you protect your private information online with passwords, you should take steps to do the same with your smart home. When shopping for smart home devices, it’s important to shop for brands that you trust, and those that invest in keeping your information secure.

Internet-Dependence or Power-Dependence

If everything from the locks on your doors to the blinds on your windows is controlled by electricity and an internet connection, your house could literally stop working in the event of a power or internet outage. When researching smart devices, look for options with analog or battery backups so you're never fully dependent on electricity for your home to function.

Installation Costs

Installing hardware and software can get expensive, especially if you are going all-in on as many devices as possible. The higher the quality of the devices you buy, the higher the amount of money you will usually need to invest, so be sure you conduct a cost-saving analysis if saving money is your main goal.

Learning Curve

It often takes some trial and error to properly install and set up devices on your IoT network, and program them to do what you want, when you want it done. Setting up smart devices incorrectly could cause them to lose functionality, or even cause more frustration than they solve for.

Examples of Common Smart Home Devices

Nearly every existing appliance and device in your home has a smart counterpart, including these smart home products:

  • Smart door locks
  • Smart thermostats and other temperature control technology
  • Smart garage door openers
  • Smart bulbs and smart lighting systems
  • Solar panels and other clean energy systems
  • Smart alarm clocks
  • Smart home security systems
  • Smart video doorbells
  • Smart refrigerators
  • Smart ovens
  • Smart entertainment systems, like smart speakers and televisions
  • Smart tracking and sensing devices

This list is by no means exhaustive, as everything from smartwatches to smart yoga mats can be integrated into your home’s IoT network.

See how much you can save by going solar with Palmetto

Step 01
Step 02
My electric bill is $290/mo

The Smart Home Hub

The most important element of a well-functioning smart home is the smart home manager. This is the device or app that serves as the smart home hub from which you can control and remote control all of your other gadgets and devices, and often determines what devices can work together. Examples of common smart home managers include:

These digital assistants all come with companion smartphone apps that allow you to set and modify the preferences of all your linked devices. Many of them are also smart speakers that can be voice-activated to enable hands-free operation.

Creating a Smart Home

Designing your dream smart home could be well within reach, as nearly any home could become one with the right devices. Since there is often no need for large remodels or contractors, you can usually take many of these six steps yourself:

  1. Choose a smart home manager
  2. Install smart plugs
  3. Add smart devices
  4. Upgrade your WiFi
  5. Invest wisely

Choose A Smart Home Hub

Your smart home manager helps your devices communicate with one another, and with you. We recommend selecting a smart home manager with a speaker that allows you to use voice activation to perform tasks, such as turning on music or setting reminders. Many also include a smart display that can show you the status of smart devices, or feed in things like live video from security cameras.

Install Smart Plugs

Smart plugs are basically WiFi-enabled adapters that connect the plugged-in device with your smart home manager. This is one of the easiest ways to get started with smart home technology, and a typical first step for many homeowners. Smart plugs help you avoid installing totally new outlets, while also allowing you to set up the automation for your electronics as well as enabling voice commands to control those devices.

Add Smart Devices

Whether you are going all-in on upgrading your appliances to smart ones, or just starting with a select few, you need to make some decisions about how to build your network. A good place to start is either with a smart thermostat or smart light bulbs, both of which can help you start saving money on your electricity bill from day one.

Upgrade Your Wi-Fi

The more devices you have connected to your Wi-Fi, the more powerful your home network needs to be. You can increase your Wi-Fi power by:

  • Upgrading to faster WiFi, such as 5GHz or the newer 6GHz
  • Placing your router in a centralized spot that best reaches all of your devices
  • Keeping your router and its software updated
  • Getting a WiFi extender or mesh network to cover devices that struggle to reach your router signal

Invest Wisely

To save money when building your smart home system, you can gradually work your way up to more advanced devices. For example, determine which smart devices could serve you best in the beginning and add devices over time rather than all at once. Because smart devices are becoming increasingly popular, you can often find appliances and gadgets on sale during holidays and special events like Black Friday and Cyber Monday.

Once you’ve got the basics covered, the possibilities are endless when it comes to adding devices to your smart home system and expanding its capabilities!

Keeping Your Smart Home Safe

One final step to creating a smart home haven is to ensure you are protected with cybersecurity safety measures. As we discussed earlier, it’s important to keep your smart devices safe from hacking or malware. You can accomplish this by taking the following steps:

  • Only buy electronics from reputable brands and stores
  • Avoid using the same password for every device login
  • Utilize Two-Factor Authentication
  • Set up a unique WiFi router name and a strong password for your smart home devices
  • Disable features that you do not plan to use
  • Keep all of your devices up to date

Even the most high-tech gadgets are vulnerable to cybersecurity threats if they are not properly protected. Just make sure to research your devices before you purchase them to identify any potential issues, and do everything you can to protect your privacy and personal information, and you should be covered from the typical threats.

The Dream of the Smart Home

When you have many smart devices working together on one network, you can virtually instruct them to work together to accomplish advanced goals. The ultimate goal is to create a seamless lifestyle that could look something like this:

  • As you approach your home after a long day of work, your garage door opens for you automatically because it senses your smartphone pulling into the driveway.
  • Since your smart garage door opener communicates to your door lock that you have arrived home, the front door is opened before you exit your car.
  • Exactly when you step inside the door, your favorite music begins playing, and the lights are perfectly dimmed for evening time.
  • Upon entering your living room, your smart home manager asks whether you're in the mood to watch on TV or listen to music as you settle in to relax for the night.

While this may sound like a scene straight from a utopian story, this is what was envisioned by the pioneering engineers in the smart home industry, and what is increasingly possible with current smart home technologies.

A Smart Home Is A Smart Investment

Having a smart home not only puts you at the forefront of technological advancements, but can provide you with peace of mind knowing that you are doing your part to help the environment. Whether you envision a modern, futuristic home, or simply wish for your devices to act more intuitively towards your needs, every step towards creating a smart home puts you closer to maximizing your home's efficiency and reducing your carbon footprint.

At Palmetto, our goal is to help customers understand the importance of clean energy solutions. We believe that technology can help us become more sustainable and eco-friendly, including smart homes and solar panels.

If you are ready to take the next steps towards lowering your energy bills, building a clean energy future, and powering your smart home with a smart energy option, talk to Palmetto about solar panel installation today. Our Free Solar Design and Savings Estimate Tool can help you learn more about the many benefits of switching to solar power, and give you an idea of your potential solar savings.

See what solar can do for you:

My electric bill is $290/mo
About the AuthorCory O'Brien HeadshotCory O'BrienSenior Director - Growth Marketing

Cory brings over 8 years of solar expertise to Palmetto, and enjoys sharing that knowledge with others looking to improve their carbon footprint. A dog lover residing in Asheville, NC with his wife, Cory graduated from UCSB. If you run into him, ask him about the company he founded to rate and review beer!

Subscribe to our newsletter

Get the latest insights on solar, clean energy, climate change, and sustainable living—delivered right to your inbox every month.

Read More From The Clean Energy Learning Center

Palmetto is your go-to resource for news, updates, and questions. Knowledge is power. Invest with confidence.

A heat pump with the words Is Home Electrification Right for You?

Is Home Electrification Right for You? Key Factors to Consider

Switching from natural gas to electric appliances can be good for your health, your pocketbook, and the climate. Here's what to consider before switching over.

Kilowatt-Hours (kWh) Explained: Understanding Your Energy Usage

Better understand your energy usage by learning what kilowatt-hours are and how this important concept could benefit you.
The words "Tesla Powerwall Guide" over images of two Tesla Powerwalls mounted to the side of a home, storing energy from solar panels.

The Palmetto Guide to the Tesla Powerwall

Comprehensive guide to Tesla's popular home energy storage system, offering backup power, energy independence, and financial incentives.

See how much

you can benefit

going solar with Palmetto

What's your monthly electric bill amount?