Energy Innovation News

How Do Thermostats Work with Demand Response Programs?

Gexa Energy
April 26, 2023
minutes read
Gexa Energy
Publication Date:
September 1, 2023
Last updated:
April 2, 2024

If you’re looking for ways to improve your home’s energy efficiency, there are many steps you can take, from adjusting your water usage to switching to more efficient light bulbs. Even the electricity plan you choose with your local utility company can help you save energy—and save money on your monthly electricity bills.  

Demand response programs use a smart thermostat controlled by the power company to help monitor and control your electricity usage during peak hours, helping your utility company to meet local energy demand and allowing you to conserve energy and reduce your electricity costs.  

In this article, you’ll learn about demand response programs, smart thermostats, and how you can take advantage of one of these programs to lower your energy usage and spending.  


What Is Demand Response?

Demand response programs, as their name implies, are designed to meet the high demand for energy during peak times of the day. Generally, the highest demand time is between 4 PM and 7 PM on extremely hot days—when many people return home from work or school and want their homes to be comfortably cool in the warmer summer weather.  

To keep up with the demand for electricity during these peak times, utility companies must generate more power, which in turn increases the overall cost of energy. Fortunately, advances in smart thermostat technology have allowed utility companies to use these devices to help manage the cost of electricity for individual households and for all their consumers.  

When you sign up for a smart thermostat demand response program, your utility will use your smart thermostat, which is connected to Wi-Fi, to adjust your home temperature automatically during these high-demand times. In return, the utility will provide you with incentives or rebates that reduce your monthly electric bills.  

Your utility will notify you of upcoming demand response events, and you have the option to opt out and manually control your home temperature instead of allowing the utility to adjust the temperature for you. However, when you choose to participate in a demand response event, you could enjoy reduced household energy consumption and incentives from your utility company.  

With the help of smart thermostat technology, demand response programs can learn how your household uses energy and optimize your usage to reduce electricity consumption and could save you money while also limiting the impact and strain on the power grid. Like virtual power plants, demand response programs are another way to monitor and optimize energy usage and improve energy efficiency.

The Benefits of Demand Response Programs

The biggest advantage of demand response programs for individual consumers is their ability to reduce energy costs, adding up to major savings. On a larger scale, demand response programs could also help reduce the overall cost of electricity in your area, leading to lower retail rates for you and your neighbors.  

If you want to strive to live a greener lifestyle and reduce your energy usage, you can’t go wrong with a demand response thermostat and program. You’ll use significantly fewer megawatt-hours of energy and limit the need to turn on more electricity-consuming devices, like high-powered fans or backup air conditioning units, to keep your home comfortable and cool on the hottest summer days.

Demand response programs also help to reduce energy consumption at specific times, resulting in more energy efficiency in your area overall. Limiting the demand on the electrical power grid, even if just at specific times of day, could have a major impact on ensuring the affordability and reliability of energy for everyone. With a lower demand for energy putting strain on the power grid, there is also a lower possibility of blackouts or extended power outages in your community.  

Reduced energy demand can also limit the need for constructing new power plants to provide additional electricity supply, reducing greenhouse gas emissions, and slowing down climate change. Participants in demand response programs can even become more conscious of their electricity use and look for additional ways to reduce their consumption, transition to more environmentally-friendly lifestyles, and establish energy-efficient homes.  

How to Sign Up for a Demand Response Program

To sign up for a demand response program, contact your retail electric provider. While the specific process for signing up may vary depending on the company, the best place to start is by reaching out and learning what steps you need to take to sign up for a demand response program.  

The only piece of equipment you will need is a smart thermostat. However, each utility company uses different brands and models of smart thermostats in their demand response programs, so make sure you have the right one. If you don’t, you may need to purchase and install a new smart thermostat in your home before signing up for your provider’s demand response program.  

Learn more about how smart thermostats can boost energy savings in your household.

Gexa’s Smart Thermostat Electricity Plans

Take control of your energy costs with Gexa Energy by signing up for one of our Smart Thermostat Electricity Plans. Each plan includes up to two free Sensi™ smart thermostats and expert installation when you sign up for a Gexa Energy Saver Plan or Energy Optimizer Service. (Eligibility requirements, terms and conditions apply. Program subject to change.)

Sign up today to save energy with smart thermostats and Gexa Energy. Shop electricity plans to find the right solution for your household.  

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Gexa Energy purchases renewable energy credits (RECs) from renewable generation resources throughout North America to match 100% of the energy sold under your electric plan. The RECs Gexa purchases represent the renewable attributes of power generated from a variety of renewable energy sources, including, but not limited to, the sun, wind, geothermal, hydroelectric, wave or tidal energy, and biomass or biomass-based waste products, including landfill gas.