Demand Response (DR) programs are becoming increasingly popular as a way for utilities to manage energy demand during peak use times, improving the stability of electrical grids and offering various benefits to consumers. However, despite the growing adoption rate amongst utilities and their customers, there are still many misconceptions surrounding the purpose, delivery, and benefits of Demand Response programs.
In this blog post, we’ll debunk 8 of the most common myths about Demand Response programs and what they actually mean for consumers.
Table of Contents:
- Myth: DR Programs Are Only for Large Businesses
- Myth: Demand Response Programs Are Complicated & Inconvenient
- Myth: DR Programs Don’t Really Save Consumers Money
- Myth: Demand Response Programs are Actually Rolling Blackouts
- Myth: Participating in DR Programs Will Damage My Appliances & HVAC System
- Myth: Demand Response Programs Have No Real Environmental Impact
- Myth: Demand Response Is Only Relevant During the Summer
- Myth: Participating in DR Programs Gives My Utility Control Over My Electricity
1. Myth: DR Programs Are Only for Large Businesses
Debunked!
Fact: While larger industrial and commercial customers have traditionally been the primary participants in Demand Response programs, that is no longer the case. Many utilities have expanded their DR offerings to include residential customers as major stakeholders. Smart thermostats, home automation systems - like Apple Home, Google Home, and Amazon Alexa - and other smart energy management devices make it easy for homeowners to participate, reducing their energy bills while contributing to grid stability.
In 2024, consumer participation in DR programs in North America is growing significantly, largely due to the expansion of smart grid infrastructure and increasing consumer awareness related to energy efficiency. For example, in the US alone, there are over 10 million households currently participating in a Demand Response program.
In Canada, the number of households participating in DR programs is estimated at around 10%, but growing rapidly as regional utilities continue to expand their residential Demand Response program offerings.
2. Myth: Demand Response Programs Are Complicated & Inconvenient
Debunked!
Fact: Today’s DR programs are designed to be user-friendly and have little to no impact on participants’ daily life. For example, smart thermostats can automatically adjust temperatures during peak demand periods with virtually zero effort required from the DR program participant.
Most programs also provide notification in advance of planned Demand Response “events” - specifically-designated hours during which customers are asked in advance to be mindful of their energy consumption - giving participants the option to override the adjustments at any time.
The automation and remote control provided by smart thermostats make it easier than ever for homeowners to participate in Demand Response programs. Smart thermostats can be programmed to create heating schedules based on the time of day or home occupancy, and can also be adjusted remotely via a smartphone app when participants are not at home.
3. Myth: DR Programs Don’t Really Save Consumers Money
Debunked!
Fact: One of the key benefits of Demand Response programs is the potential for consumer cost savings. Saving money by participating in Demand Response can happen in a few different ways:
- Shifting time-of-use. By reducing their electricity usage during peak demand periods, when energy prices are typically higher. By shifting their usage to off-peak times, they can avoid higher rates and take advantage of lower prices, directly reducing their energy bills.
- Utility bill incentives. Many DR programs offer financial incentives or rebates to participants who successfully reduce their consumption during peak use periods, providing additional financial savings, often in the form of credits on their utility bills.
- Lower infrastructure costs. Participating in Demand Response programs can also help consumers avoid higher long-term costs associated with energy infrastructure. By reducing peak demand, utilities can delay or avoid the need for expensive upgrades to power plants and transmission lines. These savings are often passed on to consumers in the form of lower rates or fewer rate increases over time.
- Smart thermostat rebates. Many utilities sponsor rebates on smart thermostats and other smart energy management devices to help homeowners offset the upfront cost of upgrading their home HVAC and make it easier to participate in DR programs. Smart thermostat features like remote control, heating schedules, and real-time energy use data help users make more informed decisions about their energy use, leading to further savings.
4. Myth: Demand Response Programs are Actually Rolling Blackouts
Debunked!
Fact: Demand Response is not the same as a rolling blackout or a power outage - in fact, it’s quite the opposite.
Demand Response programs prevent outages by reducing strain on electricity grids during peak use times. By voluntarily adjusting energy usage during these periods, Demand Response program participants help ensure that the grid remains stable and that power continues to be available for everyone, without relying on expensive and environmentally-damaging peaker plants to provide additional power.
A rolling blackout is a temporary, intentional power outage that rotates through different areas within a utility's service territory to prevent a complete system-wide blackout. Rolling blackouts are typically implemented during periods of extreme demand or supply shortages, such as during heatwaves or natural disasters, to balance the power grid and avoid overloading it.
To summarize: Demand Response = proactive energy management. Rolling Blackouts = reactive energy management.
5. Myth: Participating in DR Programs Will Damage My Appliances & HVAC System
Debunked!
Fact: Demand Response programs are carefully designed to ensure that your appliances and HVAC systems are not harmed. Smart thermostats and other devices enrolled in these programs adjust settings within safe operating ranges, and any energy use adjustments that occur during DR events are minor and temporary.
Additionally, most DR programs allow participants to opt out of events if they have concerns about specific appliances or equipment in their home. The goal of Demand Response is to reduce energy use without compromising the performance or lifespan of home appliances and energy systems.
6. Myth: Demand Response Programs Have No Real Environmental Impact
Debunked!
Fact: By curbing energy consumption during peak use times, Demand Response programs are playing a significant role in reducing greenhouse gas (GHG) emissions . While precise figures vary, it's estimated that the diversion of tens of millions of metric tons of GHG emissions can be attributed to Demand Response programs since their widespread implementation across North America.
Additionally, the integration of clean, renewable energy sources - like solar and wind - into the power grid supports Demand Response by providing flexible and decentralized energy generation, ultimately supporting Demand Response goals by helping to create a more resilient and sustainable power system.
Green Fact: To date, Mysa Smart Thermostats have helped homeowners save over 150 million kilowatt hours of home energy - enough to power 10,000 homes for a full year!
7. Myth: Demand Response Is Only Relevant During the Summer
Debunked!
Fact: While it’s true that Demand Response programs are often associated with summer energy use, they are relevant to maintaining stable electrical grids year-round - particularly given the increasing prevalence of extreme weather events.
Demand Response can enhance grid stability during the hottest months of the year, when high temperatures lead to increased air conditioning loads. As energy consumption spikes, the grid can become strained, increasing the risk of blackouts or brownouts. DR programs help manage this by incentivizing consumers to proactively reduce or shift their electricity use during peak periods. By lowering the overall demand, DR reduces stress on the grid, maintains a balanced supply-demand ratio, and ensures reliable power delivery even during extreme heat waves.
In the winter, heating needs can drive significant increases in electricity usage - especially in regions reliant on electric heating systems - which can result in grid strain. Demand Response helps stabilize the grid by encouraging users to decrease consumption during peak times or by shifting non-essential usage to off-peak periods. This not only prevents grid overloads but also minimizes the need for additional, carbon-intensive power generation, supporting both grid reliability and environmental sustainability during the winter months.
Pro Tip: Smart thermostats for electric baseboard heaters and ductless mini-split heat pumps and AC can help homeowners manage their seasonal energy use and easily participate in DR programs offered by regional utilities.
8. Myth: Participating in DR Programs Gives My Utility Control Over My Electricity
Debunked!
Fact: Participating in a Demand Response program does not give your utility the power to turn off your electricity.
Demand Response is about temporarily adjusting energy usage, not cutting off your power. By enrolling in a Demand Response program, participants agree to allow small adjustments to their energy consumption during peak demand periods. These adjustments are typically made through devices like smart thermostats, which might slightly raise or lower their
The goal of Demand Response is to help reduce demand on the grid without disrupting participants’ daily lives. DR events are designed to be subtle and minimally impactful, ensuring participant comfort while helping to maintain grid stability. These innovative programs are built on voluntary participation and cooperation between consumers and their utility providers, rather than surrendering control over your electricity.
Demand Response programs offer participants numerous benefits, from cost savings and grid reliability to environmental sustainability. By debunking these common myths, we hope to encourage more consumers to consider participating in these programs and contributing to a more stable and efficient energy grid. Whether you’re a homeowner or a business owner, Demand Response is an accessible and valuable tool in today’s energy-savings landscape.
Curious about how you can get involved in Demand Response? Check for utility-sponsored rebates and incentives that might be available in your area!