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​Residential Demand Response

​Demand response (DR) is hardly a household name. By this point, most consumers are familiar with basic concepts of energy efficiency, such as switching from incandescent lightbulbs to LEDs or upgrading to ENERGY STAR® appliances to save money and reduce energy waste. But talk to those same customers about peak demand or load shifting, and you’ll often leave them scratching their heads.

So how can demand response programs become interesting, appealing, and most of all, easily understood by the average consumer? Beginning with the rise of the smartphone, adoption of connected technologies has grown steadily over the past few years, creating a unique opportunity for demand-response-enabled devices.

What Are They

Devices that are already web-enabled or offer potential storage opportunities are emerging as the first technologies used by utilities to support DR programs, with smart thermostats and residential water heaters as frontrunners.

Consumer awareness of popular smart thermostat brands has driven their increased adoption, indirectly supporting and complementing utility demand-response programs. All it takes is a quick software upgrade that opens up two-way communication between customers and utilities, allowing willing thermostat owners to participate in demand-response events and mitigate peak-demand charges.

Water heaters, which are inherently able to store and release thermal energy over time, also offer DR potential. Grid-enabled water heaters are currently being tested regionally with a variety of communication methods and protocols, ranging from Wi-Fi to cellular networks to radio signals. In most cases, the water heater technology integrates with the communication port to transform the appliance into a system that heats and stores hot water, before and after peak demand times.

How They Work

Residential products such as smart thermostats and water heaters can integrate with DR programs in a range of ways, from instigating behavioral changes in energy use to reducing grid demand through technical features.


For instance, whether customers have an existing smart thermostat or purchase one through a utility program, they can link this device to a utility DR program, allowing them to participate in events via smartphone, tablet, or computer. Utilities can then use DR-enabled smart thermostats to engage customers in demand-response programs in a range of ways, from sending pop-up alerts to tell consumers about upcoming opportunities (i.e. “Earn money toward your bill by saving energy tomorrow between 5pm – 7pm!”) to directly controlling equipment in the home with permission from the homeowner. The smart thermostat can even automatically pre-cool or pre-heat a residence or draw on data to forecast weather conditions that might impact peak demand and adjust accordingly.  

DR-enabled water heaters address the fact that most hot water is used in the morning and evening, when people shower before work or do dishes after dinner. The increase in energy required to heat water results in significant grid demand. Equipping water heaters with a communication port allows water to be heated at off-peak times, such as late afternoon, and then stored for later use. This load-shifting frees up capacity at peak hours, while ensuring that customers have hot water when needed.

Who’s Using It

Smart thermostat programs are being implemented or piloted by numerous utilities across the United States. And, regionally, BPA and some of its utility partners are actively evaluating the potential grid-management benefits of smart thermostats.

Energy-efficient heat pump water heaters are still emerging as DR tools, with some notable pilot projects at the regional level. To assess the opportunity associated with DR-enabled water heaters, BPA participated in a region-wide pilot with eight Northwest utilities, the Northwest Energy Efficiency Alliance (NEEA), and two national manufacturers. This pilot evaluated the demand-response effectiveness of the CTA 2045 modular communication port in electric resistance and heat pump water heaters across more than 250 households, leveraging manufacturer relationships honed by NEEA through existing energy-efficiency efforts. Results from this pilot will inform a business case intended to help influence manufacturers to add the CTA-2045 port to their water heaters moving forward.

What to Consider

The integration of residential products with demand-response programs can be impacted by customer acceptance and participation, with privacy concerns and high opt-out rates posing possible obstacles to engagement. However, customers aren’t automatically enrolled in a DR program when they set up a connected device – these are voluntary opt-in programs.

The ability to seamlessly incorporate popular residential devices into a home’s existing system and empower the customer to take an active role in managing electrical use has helped this topic gain prominence the regional energy conversation. With today’s energy-conscious customer increasingly interested in both smart technology and tools that save money and energy, residential DR programs seem poised for continued growth in the years ahead.