How it Works

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

For example, 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, like sending pop-up alerts to notify consumers about upcoming opportunities (e.g., “Earn money toward your bill by saving energy tomorrow between 5pm – 7pm!”). A smart thermostat can even automatically pre-cool or pre-heat a residence or access weather forecast conditions that might impact peak demand and adjust accordingly.

DR-enabled water heaters address the demand for hot water in morning and evening hours. 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.

What to Consider

The integration of residential products with demand response programs is impacted by customer interest 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 in regional energy conversations. With today’s energy-conscious customer increasingly savvy in energy conservation, smart technology, and money-saving opportunities, residential DR programs are growing.