Residential demand response to reach 65 million by 2023

The total number of worldwide residential demand response sites is expected to grow from 6.8 million in 2014 to 64.8 million in 2023, according to a new report from Navigant Research.

Residential demand response, in the form of programs designed to encourage consumers to use less electricity during peak hours and to shift their energy use to off-peak times, has been around since the 1970s.

Today, with the development of advanced metering infrastructure (AMI) and smart, two-way communicating thermostats, the technological and market limitations to demand response are being overcome.

“As AMI is deployed around the world, residential DR follows closely behind,” says Brett Feldman, senior research analyst with Navigant Research. “AMI allows for near real-time access to interval meter data, so residential DR programs will migrate from the traditional long-lead time command and control model to more customer-friendly, flexible, and price-based methods.”

As the overall market for residential DR expands, the number of sites linked to dynamic pricing programs will also grow rapidly, according to the report. Today, 88 percent of residential DR sites are part of direct load control programs, which pay customers an annual fee for agreeing to have a control device installed on their air conditioners, and only 12 percent are associated with dynamic pricing systems, which bill customers different rates for different time periods. By 2023, that split is expected to be closer to 50/50, according to the report.

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