Smart Thermostat Demand Response Programs and Rewards: What To Know

Key Points of This Article:

• A smart thermostat demand response program lets your utility briefly adjust your enrolled thermostat during high-demand periods, easing pressure on the grid before returning to your normal settings.  

• Your savings within a thermostat response program depend on the program's rewards, such as bill credits, gift cards, or thermostat discounts, and on your electricity rate, and these incentives are not the same as guaranteed lower bills. 

• A program is most worthwhile if you are comfortable with small, temporary temperature changes, but it may not suit households with strict comfort needs or privacy concerns. 

Many homeowners assume that having a smart thermostat automatically means lower electricity bills, especially when energy demand is high. But the thermostat alone does not create savings. What matters is how it manages your heating and cooling use and whether your electricity rate or an available demand response program rewards you for using less energy at certain times. 

Managing your energy consumption through your smart thermostat could come with perks! Did you know your thermostat can be a part of a program that increases your thermostat's temperature during peak hours to save energy from the grid? This can help lower your energy bills, too! 

If you're looking for more, keep reading! We'll explain how demand response programs work, how they affect your bill, and what to check before you enroll.

What Is a Smart Thermostat Demand Response Program? 

A smart thermostat demand response program lets your utility or energy supplier temporarily adjust your enrolled thermostat, so your heating or cooling system uses less electricity when demand is high. 

Here is how it works: Imagine a very hot afternoon when air conditioners across your area are running at the same time. If you joined the program, your utility can send a signal to your smart thermostat asking it to raise the temperature by a few degrees for a short period. This helps your air conditioner run less while the electric grid is especially busy. 

One home using less electricity may not seem like much. But when thousands of enrolled thermostats make small changes at the same time, the combined reduction can help ease pressure on the grid. After the event, your thermostat returns to its normal setting or schedule. 

Utility results show how small thermostat adjustments can contribute at a larger scale. In 2025, New York utility RG&E reported nearly 11,000 thermostats enrolled across their programs. RG&E achieved an average electricity-demand reduction of about 21.5 megawatts during three of its thermostat demand response events. 

It's also worthy to note that homeowners just like you are interested in thermostat demand programs. In an August 2026 Santanna Energy Experts survey, 11 of 17 respondents (65%) said they would allow temporary thermostat adjustments during periods of high electricity demand for a potential credit on their next bill. 

Joining is usually voluntary, and you still control your home's temperature.  

How Do Smart Thermostat Demand Response Programs Work? 

Here is what typically happens when you join a thermostat demand program: 

1. You enroll an eligible thermostat.

First, confirm that your utility or supplier offers a program and check whether your smart thermostat qualifies. Eligible brands may include Google Nest, ecobee, and Sensi, but approved brands and models vary by program. 

2. The program schedules a demand response event.

Once enrolled, your utility or program administrator chooses a period when electricity demand is expected to be high, such as a very hot afternoon. You may receive a notice through your thermostat, mobile app, email, or text. 

3. Your home may be cooled or heated ahead of time.

Some programs prepare your home by cooling it slightly before a summer event or warming it before a winter event. This can help your home stay comfortable when the thermostat setting changes. 

4. Your thermostat is adjusted for a limited time.

During the scheduled event, the program sends a signal to your thermostat to change the temperature by a few degrees. This helps your heating or cooling system run less while many homes and businesses are using electricity. The Federal Energy Regulatory Commission explains that demand response may include small, automatic smart thermostat adjustments during times of peak electricity demand. 

5. Your thermostat returns to normal.

When the event ends, your thermostat goes back to its regular setting or schedule. Your participation may then count toward an enrollment, seasonal, or annual reward. 

The exact process depends on the program. Before enrolling, check how often events may happen, how long they can last, how much the temperature may change, and whether overriding an event can affect your reward. 

How Can a Demand Response Program Affect Your Energy Bill? 

A demand response program may lower your energy costs by rewarding you for participating, helping your home use less electricity, or moving some electricity use away from higher-priced hours.  The amount you benefit from depends on the program. 

Your electricity rate also matters. With a fixed-rate supply plan, your rate per kilowatt-hour generally stays the same throughout the day, so your bill may only decrease if you use less electricity overall. With a time-of-use rate, reducing or shifting HVAC use away from higher-priced peak hours may provide additional savings. 

You may benefit from additional savings, like a bill credit, being rewarded with a gift card or thermostat purchase discount, which can provide financial value without lowering the charges shown on your electric bill when you enroll in a demand response thermostat program. 

How Much Can You Save With a Smart Thermostat Demand Response Program? 

The amount you can save through a smart thermostat demand response program depends on the incentives available through your local utility.  

AEP Ohio, offers different incentives depending on how you obtain your eligible smart thermostat: 

• Buy through AEP Ohio's marketplace: Receive a $75 instant discount when you purchase a qualifying thermostat and enroll in the program. 

• Enroll a thermostat you already own: Receive a one-time $50 digital gift card after enrolling an eligible device. 

• Buy from another retailer: Eligible purchases may qualify for a $25 purchase rebate provided as a digital gift card, plus a separate $50 enrollment reward. 

Participants can also earn a $25 digital gift card each year by participating in at least 75% of the program's peak-demand events. 

This is one example available to eligible AEP Ohio customers. Programs, incentives, and participation requirements vary by utility service territory and may change. 

In Illinois, eligible Ameren Illinois customers who enroll a qualifying smart thermostat in the utility's Peak Time Savings program may receive a one-time $50 Virtual Visa Prepaid Card per device and a $25 annual participation incentive per device. During peak-demand events, the program may automatically adjust the thermostat by up to 4°F for no more than four hours.  

In Pennsylvania, Voltus and Resideo Grid Services offer a residential demand response program that allows eligible PECO customers with qualifying smart thermostats, including Honeywell Home and Ecobee models, to reduce or shift HVAC electricity use when the grid needs relief. 

These rebates provide financial value, but they are not the same as guaranteed electricity-bill savings. 

Similarly, Renew Home estimates that customers in its Rush Hour Rewards programs, including a thermostat response program, received more than $40 million in enrollment and participation rewards in 2024 across more than 100 energy-provider programs.  

What Affects How Much You Can Save? 

How much you can save through a smart thermostat demand response program depends on several factors: 

• The program's reward: Incentive amounts and payment types vary by program. 

• Whether you already own a thermostat: Some programs offer a purchase rebate for a new thermostat, while others reward you for enrolling one you already own. 

• How often you participate: You may need to participate in a certain number of events to receive the full reward. 

• How often you override events: Frequent overrides may reduce or eliminate certain incentives. 

• Your electricity rate: Moving energy use away from peak hours may provide additional savings if you have a time-of-use rate. 

• Your HVAC energy use: You may save more if the thermostat adjustments reduce your total electricity use rather than simply move it to another time. 

• The weather: Extreme temperatures may cause your heating or cooling system to run longer, which can affect how much energy an adjustment saves. 

Who Is Eligible for a Smart Thermostat Demand Response Program? 

You may be eligible for a smart thermostat demand response program if your electric utility offers one and your home, thermostat, and heating or cooling system meet its requirements. Eligibility is usually based on your utility service territory, not simply on your state or chosen electricity supplier. 

Common requirements may include: 

• An eligible residential electric account: The account may need to be active and in the participant's name. 

• A participating utility: Your home must be located in the service area of a utility that offers a demand response program. 

• A compatible smart thermostat: The thermostat must be one of the brands and models accepted by the program. 

• A Wi-Fi connection: The thermostat usually needs internet access to receive event notifications and temporary temperature changes. 

• A qualifying HVAC system: Many programs require central air conditioning, electric heating, or a heat pump controlled by the enrolled thermostat. 

• Permission to participate: Renters may need the property owner's approval to replace or install a thermostat. 

Program requirements vary, so check eligibility before purchasing a thermostat specifically to participate. Your utility or program administrator can confirm whether your account, thermostat, and HVAC system qualify. 

Can Renters Participate in a Smart Thermostat Demand Response Program? 

Renters may be able to participate if they pay the electric bill, have an eligible utility account, and meet the program's thermostat and HVAC requirements. However, they may also need permission from the property owner before replacing or installing a thermostat. 

If electricity is included in the rent or the utility account is in the landlord's name, the renter may not be able to enroll independently. Before signing up, check the program rules and ask the property owner whether thermostat changes are allowed. It may also be helpful to keep the original thermostat so it can be reinstalled when you move. 

How Do You Join a Smart Thermostat Demand Response Program? 

Step 1: Check for Programs 

Visit your utility or supplier's website or contact customer service to ask whether it offers a residential smart thermostat demand response program. Availability is based on the utility service territory, so a program offered elsewhere in your state may not be available at your address. 

Step 2: Confirm Thermostat and HVAC Compatibility 

Check the program's list of eligible thermostat brands and models. You may also need central air conditioning, electric heating, or a heat pump controlled by that thermostat. 

Confirm these requirements before purchasing new equipment. A thermostat being labeled "smart" does not automatically mean it will work with every demand response program or HVAC system. 

Step 3: Review the Incentive and Participation Rules 

Read what the program expects from you and what you may receive in return. In a 2026 Santanna survey, several respondents emphasized wanting control over their home's temperature, including clear limits on adjustments and the ability to override a change. Their feedback highlights why understanding a program's temperature limits and override rules matters before enrolling.  

If you're thinking about enrolling in a thermostat program, be sure to check: 

• How many events may occur 

• How long an event may last 

• How much the temperature may change 

• Whether you can override an event 

• How many events you must complete to earn a reward 

• Whether the incentive is a rebate, bill credit, gift card, or thermostat discount 

• How you can leave the program 

Knowing these details can help you decide whether the reward is worth the possible changes to your home's temperature. 

Step 4: Review the Privacy Policy 

Check what information the thermostat and program may collect. This could include thermostat settings, HVAC runtime, event participation, and manual overrides. 

Review who can access the information, how it may be used, and whether it may be shared. Do not enroll until you are comfortable with the program's data-use terms. 

Step 5: Enroll and Connect Your Thermostat 

Follow the enrollment instructions provided by the utility, thermostat company, or program administrator. You may need your utility account information, thermostat model, Wi-Fi connection, and thermostat app login. 

Enrollment is not always complete as soon as you submit the form. Watch for a confirmation that your thermostat was approved and successfully connected to the program. 

Can You Participate If You Choose Your Own Electricity Supplier? 

Depending on where you live, you may actually have two paths to a smart thermostat demand response program: join one run by your utility, or join one run from your electricity supplier.  

Utility-run programs are generally open to residential customers regardless of which supplier they've chosen, since eligibility is tied to your utility delivery service rather than your supply plan.  

If both options are available to you, it's worth comparing them, since rebate amounts, device requirements, and event rules can differ between a utility program and a supplier program.  

Contact your utility or the program administrator with questions about eligibility, compatible thermostats, demand response events, and rewards. Contact your electricity supplier to ask about your supply rate or plan terms, or whether they offer their own demand response program. 

What Are the Benefits and Possible Drawbacks of Participating in a Smart Thermostat Demand Response Program? 

Whether the program is a good fit depends on your comfort needs, eligible equipment, and the value of the incentive. Here is what to consider before enrolling: 

Potential Benefits 

• You may receive a reward. Programs may offer a thermostat discount, enrollment rebate, bill credit, or gift card.  

• Your HVAC system may use less electricity during an event. Small temperature changes can reduce how often the system runs while demand is high.  

• Participation can be automatic. Once enrolled, your thermostat can respond without requiring you to change the setting each time.  

• You may lower your energy costs. Savings are possible if you use fewer kilowatt-hours or avoid higher-priced hours under an eligible time-of-use rate.  

• You help reduce electricity demand during busy periods. Small changes across many homes can ease pressure on the grid.  

Possible Drawbacks 

• Your home may feel warmer when you need cool air most. Even a small adjustment may be noticeable, especially during extreme weather.  

• Overriding events may affect your reward. Many programs allow overrides, but frequent overrides may count against participation requirements.  

• Savings are not guaranteed. An event may shift HVAC use to another time instead of greatly reducing your total electricity use.  

• Programs are not available everywhere. Eligibility depends on your utility territory, thermostat, HVAC system, and other program rules.  

• Some information may be collected. The program may receive details about thermostat settings, HVAC runtime, event participation, and overrides.  

Before joining, compare the reward with the possible comfort changes and participation requirements. A program may be worthwhile if you are comfortable with temporary adjustments, but it may not suit a household with strict temperature needs or privacy concerns. 

Is a Smart Thermostat Demand Response Program Worth It? 

A smart thermostat demand response program may be worth joining if its rewards, comfort changes, and participation rules work for your household. Because every program and home is different, the right choice depends on what you value most. 

When asked whether they'd be interested in enrolling in a demand thermostat program, Santanna Employee-Owners survey noted how household needs can influence this decision. Respondents mentioned seasonal weather, medical needs that require a consistent indoor temperature, and concerns about keeping pets comfortable being among the reasons they wouldn't consider joining a smart thermostat program.  

Consider how a temporary adjustment could affect everyone in your home before deciding whether to participate. 

A Program May Be Worth Considering If… 

• You already own a compatible smart thermostat. 

• Your utility offers a useful enrollment or participation reward. 

• You are comfortable with small, temporary temperature changes. 

• You want automatic help reducing HVAC use during peak demand. 

• You do not expect to override most events. 

• You have reliable Wi-Fi. 

• You understand and accept the program's privacy terms. 

A Program May Not Be the Right Fit If… 

• Someone in your home depends on closely controlled indoor temperatures. 

• Small temperature changes would make your household uncomfortable. 

• You expect to override most demand response events. 

• Your internet connection is unreliable. 

• You would need to buy costly equipment only to receive a small reward. 

• Your thermostat or HVAC system does not qualify. 

• You are uncomfortable with the program's data collection or sharing terms. 

Before deciding, compare the reward with the equipment cost, temperature changes, number of expected events, override rules, and privacy terms. The best program is one that fits your household without asking you to give up more comfort or control than the incentive is worth. 

Frequently Asked Questions 

What Happens If the Internet Goes Out During an Event? 

If your internet goes out, your smart thermostat may continue controlling your heating or cooling using its saved settings, but it may not receive demand response instructions or event updates. What happens depends on the thermostat and program, so check the manufacturer's guidance and program rules. 

Can Demand Response Events Damage an HVAC System? 

Demand response events should not damage a properly working HVAC system because they temporarily change the thermostat setting rather than alter the equipment itself. If your system is already having problems, such as short cycling, unusual noises, or weak airflow, contact a qualified HVAC professional before enrolling. 

Is Demand Response the Same as Time-of-Use Pricing? 

No. A demand response program asks participating customers to reduce or shift electricity use during selected events. A time-of-use rate charges different electricity prices during scheduled periods. A household may have one, both, or neither. 

Do Smart Thermostat Programs Operate During Winter? 

Yes, some smart thermostat demand response programs operate during winter, especially in areas where electric heating raises electricity demand. For example, Google Nest Rush Hour Rewards may adjust heating during periods of high demand caused by a cold snap. Availability depends on the utility, local climate, heating system, and program rules. 

Can You Leave a Demand Response Program? 

Yes, many demand response programs allow you to leave, but the process and its effect on your rewards vary. Check the program terms or contact the utility or program administrator to learn how to unenroll and whether leaving early requires you to repay or give up an incentive. 

A smart thermostat can help lower your energy costs during peak demand by making small changes to when and how long your HVAC system runs. However, a lower bill is not automatic. Your financial benefit may come from using fewer kilowatt-hours, moving electricity use away from higher-priced hours, or earning a reward through an eligible demand response program. 

While a smart thermostat can help you manage when and how your home uses energy, Santanna's Unlimited Energy plan can help make the supply portion of your energy costs more predictable. Eligible customers receive one flat monthly supply charge that stays consistent during the plan term, even when seasonal HVAC use changes.* 

When peak demand rises, understanding your energy use and supply costs can help you feel more prepared and in control. 

* Restrictions apply. Enrollment based upon program eligibility. Customers using more than 125% of normal monthly usage as determined by Santanna may be required to switch plans.