What Is Demand Response? A Guide for Businesses

Demand response is one of the most underused tools available to commercial energy consumers. Right now, it is more valuable than it has ever been, and the enrollment window closes March 31. What Is Demand Response?

Demand response (DR) is a utility program that pays businesses to reduce electricity use during peak demand periods. The deal is straightforward: when the grid gets strained, you pull back your consumption for a few hours. In return, you receive a bill credit or cash incentive.

Utilities employ Demand Response because a) it costs less than building a new power plant and b) it keeps utility providers from rolling out large-scale brownouts when the grid is overloaded. This arrangement works in your – and their – favor. Why Do Energy Costs Keep Going Up for Businesses?

Energy costs in the PJM grid region, which covers much of the Midwest, have gone up. Capacity prices came in 9X over forecast for 2025, and continued demand from AI data centers means this pressure will likely hold for the next three to five years. The PJM Interconnection's capacity market overview provides detailed background on how those costs get set and passed on to businesses.

Demand response gives your business a real offset against that pressure, but only if you enroll before March 31, 2026.

Who Qualifies for Demand Response?

Most commercial and industrial businesses qualify. Key requirements include a reducible electrical load of 100 kW or more and the operational ability to shift or curtail power use during event windows.

For property managers with multiple buildings stand to benefit across an entire portfolio, here are a few specifics worth understanding:

Capacity tag management: Your capacity tag is one of the largest hidden drivers of your electricity bill. DR participation, combined with proactive tag optimization, can reduce your exposure across every meter in your portfolio.

Triple-net leases: If your tenants pay their own utilities, DR positions your properties as lower-cost to operate, which can really set you apart in competitive lease negotiations.

Gross leases: If you absorb energy costs, DR credits flow to your NOI.

Green lease alignment: DR participation supports sustainability benchmarks like ENERGY STAR and LEED, which more tenants and institutional investors reference in lease conversations.

Not sure where your business or portfolio stands? TogetherSolve's energy team can assess your eligibility at no cost to you.

What Does Demand Response Actually Require?

Most DR events last two to four hours and occur a limited number of times per year. You will receive advance notice before any event. Adjustments can be as simple as a thermostat setback or a shift in when certain equipment runs.

For businesses with more complex operations, curtailment plans can be built around critical functions so day-to-day work stays intact.

Our clients who combine demand response with a sound rate strategy have seen 20-40% in total energy savings.

How Do Businesses Enroll in Demand Response Before the 2026 Deadline?

The enrollment window for 2026 summer peak season closes March 31. After that date, the next opportunity ties to the winter season.

Contact the TogetherSolve team for a free demand response assessment before the deadline. We handle program selection, enrollment, and strategy.

You earn the credits.

Reach us at togethersolve.com/contactus or give us a call 614-298-0800.