The shift to a clean energy grid is a dual-sided challenge: not only must we build new, clean energy infrastructure, but we must also fundamentally change how we manage and consume electricity. At the heart of this transition is demand response (DR), a powerful tool for balancing supply and demand. However, a significant barrier has long hindered its potential: customer participation and retention. To overcome this, utilities are turning to advanced software platforms that can manage the operational complexity of DR, turning reluctant consumers into reliable partners.

The Operational Challenge of Customer-Centric DR

For years, many utility-led DR programs struggled with a core problem: they were designed for the grid, not the customer. A recent report from Parks Associates and Resideo Grid Services sheds light on the consequences of this approach, revealing that despite a surge in smart thermostat adoption, participation in DR programs remains low at around 20% of eligible households.

The report identifies a 12% churn rate among program participants, driven by concerns over comfort, a perceived lack of control, and poor communication. For utilities, this translates to a constant battle to recruit new customers to replace those who leave, limiting the ability to scale DR programs to meet critical grid needs. This is a problem that software is uniquely positioned to solve.

Precision and Personalization: The New DR Paradigm

Advanced software is enabling a new generation of DR programs that prioritize customer experience without compromising grid reliability. The key is moving away from large, blunt events to a more targeted and intelligent approach.

  • Targeted, Shorter Events: The Resideo report highlights a dramatic shift in strategy, achieving a 173% increase in the total number of DR events from 2021 to 2024, despite only a 2% increase in average device participation. This is possible with sophisticated Distributed Energy Resource Management (DERM) systems that can precisely target a portfolio of devices, such as smart thermostats, EV chargers, and water heaters, to meet a specific load-shedding goal without inconveniencing the entire customer base. This approach ensures that events are barely noticeable to the majority of participants, a crucial factor in building and maintaining customer trust.
  • Proactive Retention Strategies: Customer churn is expensive. Modern platforms use data and analytics to monitor customer satisfaction and identify participants who may be at risk of dropping out. By tracking engagement metrics and device performance, utilities can deploy proactive retention strategies, such as personalized check-ins or educational content, to address concerns before they lead to churn. This transforms the utility-customer relationship from a transactional one into a partnership.
  • Enabling Program Evolution: A significant portion of program churn (13% of former participants) is due to utilities no longer offering the program. Modern, flexible software can support the evolution of these programs. Instead of being locked into a rigid system, utilities can use adaptable platforms to pilot new program designs, integrate new types of DERs, and align with evolving regulatory requirements, ensuring long-term program stability for customers.

From Customer Comfort to Grid Stability

As New York State’s grid evolves to integrate an unprecedented amount of new, intermittent renewables, the demand for flexible, on-demand resources will only grow. The NYISO’s 2025 Power Trends report emphasizes that the grid must maintain certain reliability attributes to remain stable. Software-enabled DR and DER programs provide a cost-effective way to meet these needs, offering the dispatchability, flexibility, and predictability of conventional generation.

By leveraging advanced software to prioritize customer comfort, offer personalized engagement, and ensure program stability, utilities can build a foundation of reliable and scalable demand-side resources. This intelligent, data-driven approach is essential for bridging the gap between customer reluctance and grid reliability, proving that a digital strategy is key to powering a cleaner, more resilient energy future.