From efficiency to empowerment

On Energy Efficiency Day, it’s worth remembering that Canada’s most affordable, reliable and clean energy resources are the ones we already have: energy efficiency and demand response. For decades, these demand-side management (DSM) strategies have helped utilities and customers cut energy waste, save money, and enhance understanding of how and when we use energy.

But efficiency and demand response alone won’t meet tomorrow’s challenges. As energy costs rise, the grid gets more complex and climate impacts increase, we need to build on DSM’s strong foundation and take the next step – unlocking the full value of distributed energy resources (DERs) like rooftop solar, storage, EV infrastructure and other smart controls and behind the meter technologies.

What DSM does today

DSM programs deliver two proven benefits:

Energy efficiency reduces overall consumption by helping households and businesses adopt efficient appliances, equipment and building upgrades. Utilities support this through incentives and rebates, making measures more affordable while lowering bills, cutting emissions and improving system efficiency.
Demand response shifts when we use energy, moving demand to off-peak hours or reducing it altogether during times of stress on the grid. This helps utilities keep the lights on at lower cost and with less reliance on fossil-fuel generation.

While DSM reduces and shifts demand, it doesn’t fully capture the opportunities created by the technologies behind the meter. DERs – solar panels, home batteries, electric vehicles, smart thermostats and other connected devices – add new flexibility, local resilience and even the ability to send energy back to the grid.

If DSM is the foundation, DERs are the building blocks of a modernized system. Together, they can transform grids from one-way delivery models into two-way, dynamic systems where households and communities actively support affordability and reliability.

What’s next

To bridge DSM and DERs, we need to address four barriers with clear solutions:

1. Policy innovation: Governments must explicitly recognize DSM and DERs as core resources. Without a clear policy mandate, utilities cannot fully plan or invest in them.

2. Standardized interconnection: Customers often face slow, inconsistent approval processes when trying to connect solar, batteries, or EVs. Transparent, streamlined interconnection rules would unlock faster adoption.

3. Regulatory modernization: Utilities today earn reliable returns on poles and wires, but little for investing in efficiency, demand response, or DERs. Modernized frameworks — such as performance-based regulation or shared-savings models — can align utility incentives with outcomes that benefit customers and communities.

4. Fair compensation mechanisms: Households and businesses that provide value by reducing demand or exporting energy should be fairly compensated. Time-based rates, demand response payments, or shared-savings structures give communities a reason to participate.

On this Energy Efficiency Day, the message is clear: DSM has always been the first step – now it’s time to take the next. By linking efficiency and demand response with DERs, Canada can avoid costly infrastructure upgrades, reduce pollution and empower households and communities to become active participants in shaping their energy future.

Efficiency gave us a foundation. Demand response showed us the power of flexibility. DERs will deliver the future. Let’s take the next step, together.