Demand response market for commercial buildings will pass $712 million by 2018

Accounting for a substantial amount of electricity consumption, the commercial sector is a major — but underserved — market for demand response.

Building owners and operators are increasingly interested in demand response offerings, and utilities are tailoring their demand response services for the commercial sector. According to a recent report from Navigant Research, annual revenue from demand response services for commercial buildings will reach $712.5 million by 2018.

“To date, the majority of the commercial customers engaging in demand response programs have been large businesses and institutions,” says Marianne Hedin, senior research analyst with Navigant Research. “Now, utilities, grid operators, and curtailment service providers are turning their attention to underserved small and medium-sized commercial business and institutional customers, which account for a significant number of facilities and sites that can contribute a considerable amount of load curtailment during a peak event.”

Growth in demand response for commercial sites is also being driven by expanding deployments of smart meters and advanced metering infrastructure (AMI), which are expected to pick up in the small and medium-sized market segment. This development will make it considerably easier for businesses and institutions to participate in the economic demand response market, where they can take advantage of dynamic pricing to obtain reduced rate structures, according to the report.

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