Demand response programs — utility rebates explained

How residential DR works

Utility forecasts peak demand 24 hours ahead. On stress days, utility signals enrolled customers via smart thermostat API.

Smart thermostat pre-cools home 1-2F starting 30-60 min before event. During event (typically 2-5 PM, 2-4 hours), thermostat raises setpoint 3-4F. Most homes don't notice the comfort difference.

Customer can opt out of any individual event via the app — typically 0-2 events per season have customer opt-outs.

Top US programs (2026)

ConEd Smart Usage Rewards (NY): $25-$85/year. Works with Nest, Ecobee, Honeywell.

PSE&G Sense (NJ): $50-$135/year. Smart thermostat opt-in.

PG&E SmartRate (CA): tiered pricing — pay 4x normal during 9-15 events but receive credit otherwise. Net winner for households that can shift load.

Eversource ConnectedSolutions (MA, CT, NH): $25-$200/year for thermostats; $400-$1,000/year for batteries via the same program.

Duke Energy Power Manager (NC, SC): $25-$60/year via direct AC switch.

Commercial demand response — bigger payments, more sophisticated programs

Commercial and industrial customers can register as demand resources directly with PJM, ERCOT, NYISO, MISO, ISO-NE, CAISO, and SPP. Capacity payments range from $30,000 to $200,000 per MW per year for being available to curtail. Larger facilities (5 MW or more) typically participate directly; smaller facilities use aggregators.

Aggregators (CPower, Voltus, Enel X, Engie, Tesla, Generac) handle market participation for facilities under 1 MW of curtailable load. They take 10 to 30 percent of payments in exchange for handling enrollment, dispatch coordination, settlements, and reporting. For most mid-sized commercial sites, aggregator-managed enrollment is the practical path.

Industrial sites that can shed 20 to 50 percent of load on 30 minutes notice qualify for the highest-paying programs. Cold storage, water treatment, manufacturing with batch-process flexibility, and large commercial HVAC are common participants. The demand-charge-strategy guide covers the operational requirements that make a facility eligible.

For multi-site retail and chain operations, demand-response participation across all sites stacks the payments. A 30-store chain shedding 50 kW per location during 10 events per year earns $30,000 to $80,000 per year combined. The multi-site-aggregation guide covers the cross-site coordination.

How residential enrollment actually works

For most residential programs, enrollment is a 5-minute online process. You log into your utility account, navigate to the demand response or rewards program section, opt in, and connect your smart thermostat (or AC switch device) via the program portal. Some programs require a paper form for one-time signup but most are fully online.

After enrollment, the utility tests your participation with a single non-binding event during shoulder season (typically May or September). This confirms the integration works. Then real events run during summer peak conditions (June through September on the East Coast, June through October on the West Coast, May through September in the Southeast).

During each event the utility sends a signal to your thermostat 30 to 60 minutes before the event start. Your thermostat pre-cools the home 1 to 2F, then raises the setpoint 3 to 4F for the duration of the event (2 to 4 hours, typically 1 to 5 PM). You can opt out of any individual event via the program app — typically capped at 1 to 2 opt-outs per season without losing the annual payment.

Annual payments are typically credited as bill credits in October or November after the summer season completes. Some programs send checks instead. Most enrollment programs require a 12-month commitment.

State-by-state program details

New York: ConEd Smart Usage Rewards pays $25 to $85 per year for thermostat enrollment in NYC and Westchester. National Grid offers a similar program in upstate. Both work with Nest, Ecobee, Honeywell, and Sensi.

New Jersey: PSE&G Sense pays $50 to $135 per year. Larger payment than ConEd because PJM capacity prices are higher in the New Jersey zone. Atlantic City Electric and JCP&L also have similar programs.

California: PG&E SmartRate is a tiered TOU plan rather than a thermostat-control program. Customers pay 4 times the normal rate during 9 to 15 events but receive credits otherwise. Net winner for households that can shift load actively. SDG&E and SCE offer similar programs.

New England: Eversource ConnectedSolutions (MA, CT, NH) pays $25 to $200 per year for thermostat enrollment, plus $400 to $1,000 per year for battery enrollment via the same program. National Grid New England has a similar offering.

Southeast: Duke Energy Power Manager (NC, SC, FL) uses direct AC switch devices (older technology) rather than thermostats. Pays $25 to $60 per year. TVA and Southern Company offer regional variations.