Demand response (DR) is increasingly becoming an important part of the resource mix for utilities and grid operators, especially in managing peak electricity demand. While both the commercial and industrial (C&I) and residential sectors contribute to peak demand, households are responsible for a significant amount of such demand. As a result, DR programs that utilities offer are essential tools for managing demand and are a key component of governmental energy policy.
Taking a clue from their U.S. counterparts, utilities in other countries are gradually realizing the potential benefits to themselves as well as their customers by introducing DR programs to their residential customers. Many have already developed such programs, especially in Europe, while others are initiating pilots to find out for themselves if they can achieve their load reduction objectives as well as a return on their investments from DR programs. In particular, they are anxious to determine the effectiveness of the two major types of programs: conventional direct load control (DLC) and price-based programs. Despite their strong value proposition, however, residential price-based DR programs are still in their infancy. Pike Research estimates that there are nearly 11 million households globally that are currently enrolled in DR programs. With a compound annual growth rate (CAGR) of 11.6%, that number of households is forecast to more than double, to over 23.5 million, by 2018.
This Pike Research report examines the developing global market for residential demand response programs, including technology issues, market drivers and barriers, and regulatory factors. The report includes detailed comparisons of price-based and direct load control DR programs as well as profiles of 17 key market players. Market forecasts for residential DR participation, spending, and load curtailment (in megawatts), segmented by region, are provided through 2018.
Key Questions Addressed:
- How will the residential DR market evolve in the next 6 years?
- How many households participate in DR programs around the world today and how many are forecast to do so in the future?
- What type of DR programs are residential participants enrolled in?
- To what extent are residential DR participants engaged with price-based DR programs, including dynamic pricing schemes?
- How much are utilities and grid operators spending on key technologies to support their DR programs?
- How much load curtailment, in terms of megawatts, will be achieved through different DR programs?
- What are the market drivers and inhibitors for the residential DR market?
- Who are the key vendors in the residential DR market? What are their capabilities and what kind of competition do they face?
Who needs this report?
- Electric utilities and grid operators
- Power generation companies
- Curtailment service providers
- Consulting firms and systems integrators
- IT vendors
- Smart grid hardware and software vendors
- Industry associations
- Standards development organizations
- Government agencies and energy policy makers
- Investor community
Table of Contents
1. Executive Summary
1.1 Introduction
1.1.1 A New Era for Residential Demand Response
1.2 Key Market Forces for Residential Demand Response
1.2.1 Market Drivers for Residential Demand Response
1.2.2 Market Inhibitors for Residential Demand Response
1.3 Market Opportunity for Residential Demand Response
1.4 Competitive Landscape for Residential Demand Response
1.4.1 Key Competitive Factors for Residential Demand Response
2. Market Issues
2.1 Introduction to Market Issues
2.1.1 Meeting Growing Peak Demand
2.1.2 Residential Demand Response Growth Prospects: United States and Internationally
2.1.3 A New Era for Demand Response
2.1.3.1 Customer Engagement
2.1.3.1.1. The Green Button Initiative
2.1.3.2 Automated Demand Response
2.1.3.3 Customer-centric Automation
2.1.3.4 Price-based Demand Response, including Dynamic Pricing and Time-of-Use Schemes
2.1.3.4.1. Time-of-Use Pricing Programs
2.1.3.4.2. Examples of Time-of-Use Pricing Programs
2.1.3.4.3. Dynamic Pricing Programs: Critical Peak Pricing, Real-time Pricing and Peak-time Rebate
2.1.3.4.4. Example of Dynamic Pricing Program Deployment
2.1.3.4.5. Future of Dynamic Pricing
2.1.4 Demand Response Definitions
2.1.4.1 Federal Energy Regulation Commission and U.S. Department of Energy
2.1.4.2 PJM Interconnection
2.1.4.3 The U.K. Energy Network Association
2.1.4.4 Definition of Demand Response by a Select Group of Companies
2.1.4.5 Pike Research’s Definition of Demand Response
2.1.4.5.1. Definition of Residential Demand Response
2.1.4.5.2. Dispatchable Demand Response and Direct Load Control
2.1.4.5.3. Non-Dispatchable Demand Response
2.1.5 Definition of Demand Side Management
2.1.6 Energy Efficiency and Demand Response
2.2 Residential Demand Response Market Drivers and Inhibitors
2.2.1 Market Drivers of Residential Demand Response
2.2.1.1 Need to Save Money: Demand Response Is the “First Fuel”
2.2.1.1.1. Increasing Electricity Prices
2.2.1.2 Financial and Other Incentives of Demand Response Programs
2.2.1.3 Increasing Energy Demand and Capacity Restraints
2.2.1.4 Regulatory Mandates
2.2.1.5 Customer Satisfaction and Empowerment
2.2.1.6 Technology Advancements and Enablement
2.2.1.6.1. Deployment of Smart Meters
2.2.1.6.2. Smart Home and Home Energy Management
2.2.1.6.3. OpenADR Specification
2.2.1.6.4. Electric Vehicles
2.2.1.6.5. Growing Residential Participation of Demand Response Programs among Smaller Utilities
2.2.2 Market Inhibitors of Residential DR
2.2.2.1 Pilot versus Full-scale Deployment
2.2.2.2 Consumer Backlash to Smart Meters
2.2.2.3 Cost and Uncertain Return on Investment
2.2.2.4 Lack of Customer Interest and Involvement
2.2.2.5 Use of Legacy Systems with Limited Functionality
2.2.2.6 Lack of Standards and True Interoperability
2.2.2.7 The Availability of Lower-Cost Energy Resources and Greater Energy Efficiency Measures
2.2.2.8 Conflict of Interest for Utilities
2.2.2.9 Resistance to Change by Regulatory Agencies
2.2.3 North America
2.2.3.1 The United States
2.2.3.1.1. Arizona Public Service, Arizona
2.2.3.1.2. Tallahassee, Florida
2.2.3.1.3. Gulf Power, Florida
2.2.3.1.4. New York City: The coolNYC program
2.2.3.1.5. New Hampshire Electric Co-op, New Hampshire
2.2.3.2 Canada
2.2.4 Europe
2.2.4.1 The United Kingdom
2.2.4.2 The Netherlands
2.2.4.3 Ireland
2.2.4.4 France
2.2.4.5 Germany
2.2.4.6 Denmark
2.2.5 Asia Pacific
2.2.5.1 Australia
2.2.5.2 Japan
2.2.6 Latin America
2.2.7 Middle East/Africa
2.2.7.1 The United Arab Emirates
2.2.7.2 South Africa
3. Technology Issues
3.1 Introduction
3.2 Direct Load Control Technologies
3.2.1 One-way Direct Load Control Program
3.2.2 Two-way Direct Load Control Program
3.2.3 One-way Price-based Demand Response Time-of-Use
3.2.4 Two-way Price-based Demand Response
3.3 Technologies to Support Time-of-Use and Dynamic Pricing Schemes
3.3.1 ZigBee Standard and Home Area Network
3.4 Data Analytics Enabled by Smart Grid Technology
3.5 Demand Response Management System
4. Key Industry Players
4.1 Introduction to Key Industry Players
4.1.1 Major Global Demand Response Companies
4.1.2 Small and Mid-sized Companies with an International or U.S. Focus
4.1.3 Demand Response Partnerships
4.1.4 Residential DR Vendor and Utility Profiles
4.1.5 Aclara
4.1.5.1 Aclara’s Demand Response Management System
4.1.5.2 Aclara’s Customer Engagement
4.1.5.3 Aclara’s Marketing and Implementation Services
4.1.6 Arizona Public Service
4.1.7 Blue Line Innovations
4.1.8 Comverge
4.1.9 Consert, Inc.
4.1.9.1 Consert’s Demand Response Offerings
4.1.10 Cooper Power Systems
4.1.10.1 Cooper Power Systems Demand Response Hardware Technology
4.1.10.2 Cooper Power Systems DR Software Solutions
4.1.10.3 Cooper Power Systems DR Services
4.1.11 EcoFactor
4.1.12 Ecova
4.1.13 Energate
4.1.13.1 Energate’s Demand Response Technology
4.1.13.2 Energate Customer Case
4.1.14 GE Energy
4.1.15 Honeywell
4.1.15.1 Honeywell Residential Demand Response Hardware: UtilityPRO Thermostat
4.1.15.2 Honeywell Residential Demand Response Services
4.1.15.3 Honeywell Partnerships
4.1.16 iControl Networks, Inc.
4.1.17 Itron
4.1.17.1 Itron’s DR Technology and Services
4.1.17.1.1. Itron’s Hardware
4.1.17.1.2. Itron’s Software
4.1.17.1.3. Itron’s Services
4.1.18 SAIC
4.1.19 Sequentric
4.1.20 Smartenit
4.1.21 Sacramento Municipal Utility District
4.1.21.1 Ongoing Residential DR Pilots
4.1.22 Tendril
5. Market Forecasts
5.1 Residential Demand Response Forecast Overview
5.2 Assumptions Guiding the Residential Demand Response Forecast
5.3 Worldwide Demand Response Participation by Households
5.4 Residential Demand Response Participation by Type of Program
5.4.1 Residential Demand Response Participation by Type of Program in Different Regions
5.4.1.1 Residential Demand Response Participation by Type of Program in North America
5.4.1.2 Residential Demand Response Participation by Type of Program in Europe
5.4.1.3 Residential Demand Response Participation by Type of Program in Asia Pacific
5.4.1.4 Residential Demand Response Participation by Type of Program in Latin America
5.4.1.5 Residential Demand Response Participation by Type of Program in Middle East/Africa
5.4.2 Communication Systems by Type of Program
5.4.2.1 Direct Load Control Program
5.4.2.2 Price-Based Programs
5.4.3 Spending for Residential Demand Response Technology
5.4.3.1 Average Selling Price of Load Control Switches and Thermostats
5.4.3.2 Technology Spending on Load Control Switches and Thermostats
5.4.4 Megawatt Curtailment by Type of Demand Response Program
5.4.4.1 Megawatt Load Curtailment by Direct Load Control Programs
5.4.4.2 Megawatt Load Curtailment by Price-based Programs
5.4.5 Total Megawatt Load Curtailment by Direct Load Control and Price-based Programs
6. Company Directory
7. Acronym and Abbreviation List
8. Table of Contents
9. Table of Charts and Figures
10. Scope of Study, Sources and Methodology, Notes
List of Charts and Figures
- Smart Meter Installed Base by Region, World Markets: 2010-2020
- Number of Households by Region, World Markets: 2011-2018
- Residential Demand Response Participation Rate by Region, World Markets: 2011-2018
- Growth of Residential Demand Response Participation Rate, World Markets: 2011-2018
- Residential Demand Response Participants by Region, World Markets: 2012
- Residential Demand Response Participants Share by Region, World Markets: 2012
- Residential Demand Response Participants Share by Region, World Markets: 2018
- Residential Demand Response Participation Share (%) by Type of Program, World Markets: 2011-2018
- Residential Demand Response Participants by Type of Program, World Markets: 2011-2018
- Residential Demand Response Participation by Type of Program, North America: 2011-2018
- Residential Demand Response Participants by Type of Program, North America: 2011-2018
- Residential Demand Response Participation by Type of Program, Europe: 2011-2018
- Residential Demand Response Participants by Type of Program, Europe: 2011-2018
- Residential Demand Response Participation by Type of Program, Asia Pacific: 2011-2018
- Residential Demand Response Participants by Type of Program, Asia Pacific: 2011-2018
- Residential Demand Response Participation by Type of Program, Latin America: 2011-2018
- Residential Demand Response Participants by Type of Program, Latin America: 2011-2018
- Residential Demand Response Participation by Type of Program, Middle East/Africa: 2011-2018
- Residential Demand Response Participants by Type of Program, Middle East/Africa: 2011-2018
- Residential Demand Response Participation by % Share of Direct Load Control Program Type, World Markets: 2011-2018
- Residential Demand Response Participants in 1-Way Direct Load Control Programs, World Markets: 2011-2018
- Residential Demand Response Participants in 2-Way Direct Load Control Programs, World Markets: 2011-2018
- Residential Demand Response Participation by % Share of Price-based Program Type, World Markets: 2011-2018
- Residential Demand Response Participants in 1-Way Price-based Programs, World Markets: 2011-2018
- Residential Demand Response Participants in 2-Way Price-based Programs, World Markets: 2011-2018
- Residential Demand Response Supplier Revenue for 1-way and 2-way Switches by Region, World Markets: 2011-2018
- Residential Demand Response Supplier Revenue for 1-way and 2-way Thermostats by Region, World Markets: 2011-2018
- Megawatt Load Curtailment by Direct Load Control Demand Response Programs by Region, World Markets: 2011-2018
- Megawatt Load Curtailment by Price-based Demand Response Programs by Region, World Markets: 2011-2018
- Total Megawatt Load Curtailment by Direct Load Control and Price-based Demand Response Programs by Region, World Markets: 2011-2018
- U.S. Electricity Consumption
- Example of a Wired Load Control Switch from Energate and Comfort Choice Thermostat from Carrier
- Example of a One-Way Pager from Motorola
- Communication Systems and Demand Response Program Matrix
- Typical Smart Meter Network Architecture
- Demand Response Management System Integration Capability
- Technology Enablers for Residential Demand Response
List of Tables
- Number of Households by Region, World Markets: 2011-2018
- Residential Demand Response Participation Rate by Region, World Markets: 2011-2018
- Residential Demand Response Participants by Region, World Markets: 2011-2018
- Residential Demand Response Participants Year-on-Year Growth by Region, World Markets: 2011-2018
- Total Residential Demand Response Participants by Type of Program, World Markets: 2011-2018
- Residential Demand Response Participation by Type of Program, North America: 2011-2018
- Residential Demand Response Participants by Type of Program, North America: 2011-2018
- Residential Demand Response Participation by Type of Program, Europe: 2011-2018
- Residential Demand Response Participants by Type of Program, Europe: 2011-2018
- Residential Demand Response Participation by Type of Program, Asia Pacific: 2011-2018
- Residential Demand Response Participants by Type of Program, Asia Pacific: 2011-2018
- Residential Demand Response Participation by Type of Program, Latin America: 2011-2018
- Residential Demand Response Participants by Type of Program, Latin America: 2011-2018
- Residential Demand Response Participation by Type of Program, Middle East/Africa: 2011-2018
- Residential Demand Response Participants by Type of Program, Middle East/Africa: 2011-2018
- Residential Demand Response Participation by % Share of Direct Load Control Program Type, World Markets: 2011-2018
- Residential Demand Response Participants by Type of Direct Load Control Program, World Markets: 2011-2018
- Residential Demand Response Participants in 1-Way Direct Load Control Programs by Region, World Markets: 2011-2018
- Residential Demand Response Participants in 2-Way Direct Load Control Programs by Region, World Markets: 2011-2018
- Residential Demand Response Participants by Type of Direct Load Control Program, North America: 2011-2018
- Residential Demand Response Participants by Type of Direct Load Control Program, Europe: 2011-2018
- Residential Demand Response Participants by Type of Direct Load Control Program, Asia Pacific: 2011-2018
- Residential Demand Response Participants by Type of Direct Load Control Program, Latin America: 2011-2018
- Residential Demand Response Participants by Type of Direct Load Control Program, Middle East/Africa: 2011-2018
- Residential Demand Response Participation by % Share of Price-based Program Type, World Markets: 2011-2018
- Residential Demand Response Participants by Type of Price-based Programs, World Markets: 2011-2018
- Residential Demand Response Participants in 1-Way Price-based Programs by Region, World Markets: 2011-2018
- Residential Demand Response Participants in 2-Way Price-based Programs by Region, World Markets: 2011-2018
- Residential Demand Response Participants by Type of Price-based Program, North America: 2011-2018
- Residential Demand Response Participants by Type of Price-based Program, Europe: 2011-2018
- Residential Demand Response Participants by Type of Price-based Program, Asia Pacific: 2011-2018
- Residential Demand Response Participants by Type of Price-based Program, Latin America: 2011-2018
- Residential Demand Response Participants by Type of Price-based Program, Middle East/Africa: 2011-2018
- Average Selling Price for 1-way Thermostats by Region, World Markets: 2011-2018
- Residential Demand Response Supplier Revenue for 1-way Thermostats by Region, World Markets: 2011-2018
- Average Selling Price for 2-way Thermostat by Region, World Markets: 2011-2018
- Residential Demand Response Supplier Revenue for 2-way Thermostats by Region, World Markets: 2011-2018
- Average Selling Price for 1-way Switch by Region, World Markets: 2011-2018
- Residential Demand Response Supplier Revenue for 1-way Switches by Region, World Markets: 2011-2018
- Average Selling Price for 2-way Switch by Region, World Markets: 2011-2018
- Residential Demand Response Supplier Revenue for 2-way Switches by Region, World Markets: 2011-2018
- Residential Demand Response Supplier Revenue for 1-way and 2-way Switches by Region, World Markets: 2011-2018
- Residential Demand Response Supplier Revenue for 1-way and 2-way Thermostats by Region, World Markets: 2011-2018
- Megawatt Curtailment by Direct Load Control Program by Region, World Markets: 2011-2018
- Megawatt Curtailment by Price-Based Demand Response Program by Region, World Markets: 2011-2018
- Total Megawatt Curtailment by DLC and Price-based Programs by Region, World Markets: 2011-2018
- Smart Meter Installed Base and Penetration Rates by Region, World Markets: 2010-2020
- Aclara SWOT Analysis
- Blue Line Innovations SWOT Analysis
- Comverge SWOT Analysis
- Consert SWOT Analysis
- Cooper Power Systems SWOT Analysis
- EcoFactor SWOT Analysis
- Ecova SWOT Analysis
- Energate SWOT Analysis
- GE Energy SWOT Analysis
- Honeywell SWOT Analysis
- iControl Networks SWOT Analysis
- Itron SWOT Analysis
- SAIC SWOT Analysis
- Sequentric SWOT Analysis
- Smartenit SWOT Analysis
- Tendril SWOT Analysis