Strategies for C&I Demand Response: Retail


Retail buildings tend to provide good opportunities for participation in commercial and industrial (C&I) demand-response (DR) programs. Chain retail stores, in particular, can provide significant aggregate load reduction if a number of stores in the chain participate in the program. However, even independent retail stores can achieve meaningful levels by curtailing HVAC and lighting loads.

Because retail customers are likely to notice DR events in a store—decreased lighting or warmer-than-usual temperatures—program facilitators recommend providing information to customers to help them understand and support the programs’ social and environmental benefits. Stores can inform customers by announcing events over the public address system and posting signs around the store that explain the benefits of the program. Many stores even market their participation as a green initiative, which may boost their image with customers and reduce customer complaints.

Lastly, incentive payments play a large role in attracting retail stores to participate because incentive payments boost the bottom line for the store. This is especially true if the store is concerned about losing revenue during events.

Occupancy Patterns and Peak Coincidence

Retail buildings typically operate all day and into the late afternoon and evening (sometimes as late as 9:00 p.m. on weekdays). As a result, retail stores will likely always be able to offer benefits by curtailing their loads because many utilities will have a peak in late afternoon in summer.

Also, retail stores are prime targets for DR because the majority of the occupants—visiting customers—will not be in the store for the entire duration of the event. Typically, customers may only be in the store for up to 30 minutes. This differs from other building sectors where the majority of the occupants are employees who would endure load reductions for several hours.

Key Energy Uses and Equipment

The largest electricity users in retail stores are, in order of decreasing size: space cooling, lighting, office equipment, and refrigeration—making HVAC and lighting the best targets for DR. To reduce air-conditioning loads, facility operators can increase the store’s thermostat setpoint by a couple of degrees. In some retail stores, facility operators can tap other smaller nonessential loads for curtailing during a DR event, such as vending machines, office computers, and signage. Large retail stores may also have backup generation that the facility operator could dispatch during events (although less than 10 percent of all retail stores in the U.S. have backup generation resources).

For example, an 8,000-square-foot retail store in New York achieved a significant load reduction through participating in a DR program (Figure 1). From noon to 4:00 p.m., the store’s facility operator increased the temperature setpoint by 3° Fahrenheit (F), which reduced the load of the store’s three 6-ton rooftop air conditioning units. By reducing just its air-conditioning load, the store was able to reduce demand by 4 kilowatts (kW).

Figure 1: Demand curtailment in a retail store
A retail store in New York adjusted HVAC settings in a demand-response event between noon and 4:00 p.m.
Performance requirements and flexibility

Depending on local building codes, retail stores may have mandatory indoor air quality requirements, such as ASHRAE Standard 62, “Ventilation for Acceptable Indoor Air Quality,” which may limit participation. If this is the case, facility operators must monitor ventilation rates and follow guidelines when reducing their HVAC loads to avoid air quality problems. Thermal comfort and proper lighting levels may also hinder retail stores from participating fully because they want to minimize the influence on their primary operation: selling goods. Therefore, they always want to be cautious of any potential negative effects load reduction might have on store revenue.

Typical Demand-Response Strategies

Retail stores can successfully provide load reductions by using a few proven strategies. Besides reducing lighting and HVAC loads, stores can also curtail other equipment loads, make use of a building automation system (BAS), use precooling, and employ backup generation.

Turning off lights. Although retailers are very concerned about lighting their products, they can still use a couple of strategies to reduce lighting loads. First, they can use natural lighting if products are placed near exterior windows. The store may also turn off a portion of its lights or turn off every other row of lights. Finally, during DR events, store staff can turn lights off in special-purpose areas, such as window displays, stockrooms, offices, and other peripheral rooms. You can conduct lighting strategies manually or through a BAS. Turning off lights can reduce overall building demand by 5 to 15 percent (Table 1).

Table 1: Strategies to reduce demand in retail stores
By using these strategies, retail stores can significantly cut demand.

Retail stores can also use dimming ballasts to dim the lights. Continuous dimming ballasts can gradually dim fluorescent lamps up to 90 percent without shutting them off. Studies conducted by the Lighting Research Center, an organization associated with the Rensselaer Polytechnic Institute, show that building occupants cannot detect lighting level reductions of up to 20 percent. Turning off lights also reduces cooling loads, which can provide demand relief during the summer.

Reducing HVAC loads. During a DR event, facility operators can adjust thermostat setpoints to decrease electricity demand. Some DR programs offer day-ahead notification of events, allowing facility operators to warn employees that indoor temperatures may be somewhat higher on the day of the event. However, building control designers claim that people can tolerate a temperature rise of up to 2°F over a four-hour period without feeling inconvenienced and, in many cases, without even noticing.

Manually reducing or eliminating key equipment loads. During a DR event, facility operators can turn off unused office equipment, vending machines, air handlers, and signage. This strategy requires a concerted effort on the part of employees to meet significant load reduction goals. Therefore, this strategy may not be feasible in all retail stores.

Programming building automation systems. Although only about 5 percent of all retail buildings in the U.S. have a BAS, most retail buildings larger than 100,000 square feet have them. BASs provide a couple of benefits when participating in DR programs. First, the BAS simplifies the DR implementation for the store because the BAS can be preprogrammed by the facility operator to reduce lighting and HVAC loads. Second, by properly programming the BAS, the corporate headquarters has the peace of mind that the HVAC and lighting loads will be turned back on after the event. Third, the BAS will often have detailed monitoring functionality that allows facility operators to track demand reductions.

BASs may also be tied to an automated DR system (where the DR facilitator has remote control of loads), but facility managers may be reluctant to give up control of their loads. If a chain has automation systems at multiple locations, it may be possible to manage DR strategies remotely across several stores.

Precooling. Retail stores are good candidates for precooling, a strategy in which the building is overcooled in advance of a DR event—usually overnight or during early morning. A retail building’s thermal mass helps store the cooling energy, which is slowly released throughout the day. As a result, precooling allows thermostats to be set higher during the afternoon peak.

Switching to on-site generation. A limited number of retail stores have on-site backup generation. These stores are good candidates for DR programs that allow shifting the building’s load onto these generation sources. Switching to backup generation is usually immediate, so it causes no interruptions to service.

Case Study

PETCO, one of the nation’s largest specialty retailers of pet food and supplies, has 135 retail stores—averaging around 15,000 square feet—participating in California’s DR program. PETCO received grants from the California Energy Commission, which helped fund the installation of BASs in all the stores. PETCO received almost $800,000 to fund the $1.1 million project.

Using enhanced BASs, PETCO is able to curtail about 20 percent of its total electric load by reducing lighting and HVAC loads. The enhanced BASs allow PETCO’s energy managers to send DR signals from a centralized server to all 135 stores. The energy managers centrally monitor the individual systems to make sure that the stores are providing proper curtailment levels. The company achieves temporary demand reductions of about 5 megawatts during DR events and receives about $65 per kW in incentives by participating in the program. In 2004, this allowed PETCO to reduce its monthly energy costs by $65,000.

During a curtailment event, the web-enabled BAS software communicates with individual store BASs to shed load. The individual BASs then activate a lighting and HVAC load reduction strategy depending on the time of day, energy prices, and load reduction requirements. The strategies are preprogrammed into the individual BASs. For example, the BAS is programmed to increasingly reduce lighting and HVAC loads as energy prices increase during peak periods.

In addition to load curtailment, the new systems provide other benefits. PETCO reports that the BASs have helped reduce overall energy consumption by 7 percent. The BASs have also been integrated into the pet safety system to monitor temperature and humidity levels—ensuring that animals are in safe environments at all times.


Facility Type: Retail, Energy Star Building Upgrade Manual, U.S. Environmental Protection Agency and U.S. Department of Energy

Managing Energy Costs in Retail Buildings, E Source Business Energy Advisor

Content last reviewed: