Understanding demand response and how to react to it to save money on your electricity bill.

Page Contents

Advertiser Disclosure: At ElectricityRates.com, our number one goal is to help you make better energy decisions. We adhere to strict editorial guidelines, however this post may include references to products offered from our partners.

Have you ever opened your electricity bill only to be shocked at the amount owed? You're not alone.

Record-high summer temperatures and deadly winter storms have driven up energy demand across the country. Power grids are being pushed to their breaking point. And homeowners, as well as business owners are facing sky-high electricity bills.

But what if we told you that by changing how and when you use electricity, you can save money, go green, and learn about your energy habits? Stick with us to understand demand response and how you can use it to slash your energy usage and bills.

What is Energy Demand Response?

Demand response refers to ways electricity users can shift their energy use during peak hours to ease the strain on power grids.

In summer, millions blast AC when getting home from work, spiking demand in early evenings. Conversely, in winter, everyone streams Netflix, cooks, and runs the heater from 6 to 8 pm. Meeting these few hours of huge electricity demand is extremely expensive for utility companies.

Demand response provides incentives for consumers to use energy outside of peak hours. This balances electricity supply and demand, taking pressure off grids so utilities don’t have to fire up extra power plants or call in additional staff.

This results in lower wholesale electricity prices for providers. Which can be passed along as savings to consumers through better monthly rates.

Energy Demand Response Impact On Homeowners & Renters

Residential demand response programs offer incentives and credits to households that reduce energy usage during peak demand times.

Residential demand response helps families save money on electricity by making small changes to their daily routines. By shifting when you run major appliances and adjust thermostats, homeowners and renters can contribute to demand response energy initiatives.

Instead of using the dishwasher at 6 pm, when demand is high, run it after 8 pm. Warm your home up a few degrees between 4-6 pm on cold winter days and ease up on heating during peak residential electricity demand.

Automated demand response takes convenience a step further. Using smart devices that adjust electricity usage based on signals from your provider during peak demand. This form of demand energy response allows people to contribute savings and sustainability benefits with maximum ease.

Energy Demand Response Impact on Small Business Owners

Companies can earn incentives by using less electricity during peak demand times through commercial demand response programs, reducing overhead costs. This contributes to balancing strained grids while saving on utility bills.

Demand response programs for businesses typically involve briefly powering down non-essential equipment like printers or reducing lighting loads during peak hours. Smart thermostats should be adjusted to ease up on air conditioning when electricity demand response spikes.

In exchange for participating in these short demand response energy initiatives, business owners can earn bill credits, cash rewards, and even carbon offsets through their electricity providers.

For shops with flexible working hours, commercial demand response means scheduling high-energy production tasks early or late in the day. This avoids straining grids at peak hours when electricity demand response is highest across residential and commercial spaces.

Automating equipment to match demand response signals enables commercial operators to contribute easily without hands-on management. Using tech to automate demand energy response maximizes both savings and sustainability.

Contact your local utility to learn about demand response programs available for businesses in your area. Small changes can yield major savings while supporting local infrastructure.

When are On-Peak and Off-Peak Energy Hours?

Peak hours vary depending on the time of year and where you live. Generally, peak hours are when most people get home from work for the day. People turn on lights, TVs, and settle in for the night. This requires more electricity than the rest of the day.

Conversely, off-peak hours are when energy is the cheapest and when providers may offer discounts for using energy. These are usually in the morning, during the workday, and later at night.

Here’s an overview of peak and off-peak hours by Eastern, Central, Mountain, and Pacific time zones.

Demand Response Programs

Utility companies and grid operators offer various demand response programs as a way to balance electricity load and costs during peak usage times.

Consumers can choose to use less energy temporarily when demand response becomes critical on the network. In exchange for participating in these demand response energy initiatives, households, and businesses can earn financial incentives like bill credits, cash rewards per kWh reduced, and more depending on the type of electricity demand response program.

Some of the most common options include:

  • Direct load control programs allow providers to remotely adjust connected smart thermostats and appliances during peak hours. This automated demand response is convenient for consumers.
  • Time-of-use and critical peak pricing plans offer cheaper electricity rates during off-peak times. This incentivizes shifting usage away from peak hours.
  • Curtailment programs give larger commercial consumers big rewards for agreeing to power down operations when electricity demand reaches critical levels.
  • Direct Response Events encourage participants to reduce their electricity usage. DR events can be caused by various factors. Such as anticipated energy demand exceeding supply, grid issues, or weather situations. DR events are typically announced in advance, and participants are informed about the event’s duration and the desired reduction in energy consumption.

Regardless of the demand response program you choose, the goal is to lower electricity expenses by using energy more efficiently. This, in turn, helps to create a more sustainable system. Contact ElectricityRates.com to explore programs available for your home or business!

How Do I Enroll In An Energy Response Event Or Program?

Here are the five simple steps to participate in an energy response program to save money.

  • Check with your utility company: Many offer demand response programs for their customers. Contact them to ask about available programs and how you can participate.
  • Research third-party service providers: Some companies specialize in providing demand response services, working with utility companies and grid operators to implement and manage DR programs. These providers may offer services such as energy management systems, load curtailment, and demand response automation.
  • Review incentives and rewards: Demand response programs often provide incentives for reducing electricity use during peak demand periods. These incentives can include bill credits, rebates, or other financial benefits.
  • Consider automated solutions: Some demand response programs offer automated solutions, such as adjusting your home thermostat temperature or cycling an air conditioner during demand response events.
  • Participate in DR events: When a demand response event is triggered, you can reduce your electricity usage by adjusting the use of appliances, turning off lights, or shifting the time of energy use.

With these steps, you can help balance electricity supply and demand across the grid. This ensures a more stable and sustainable energy system while saving on energy costs.


Demand response programs let people earn rewards for cutting electricity use during peak hours. This helps balance supply and demand on power grids. It also keeps costs lower across the entire energy system.

By shifting when you run appliances and equipment, you can get bill credits or cheaper rates from your utility company. This saves money while supporting grids.

As always, check out ElectricityRates.com's marketplace to shop for authorized providers in your area. Compare electricity plans to find the best provider and start saving today!