DSM Programs – What Are They and How Can They Benefit Your Company?

The understanding that energy efficiency is good for the environment has become balanced by the realization that it is financially beneficial to companies. However, in order to save money through energy-efficiency, you have to spend money to implement it, and the cost can be significant. Because energy efficiency retrofits can reduce companies’ yearly utility costs by 35-60 percent, they typically deliver an impressive ROI that makes their upfront cost seem negligible. Even so, there still are many companies that cannot pay for energy efficient technology upfront, and traditionally these companies have been left without options. Today, however, energy efficient design is becoming increasing affordable through the outgrowth of Demand Side Management (DSM) programs.

Demand Side Management Programs-also known as energy demand management-are programs that encourage energy users to incorporate energy efficient design. DSM programs typically involve four parties: an energy supplier, an energy efficiency provider, a government organization and the customer. The energy supplier acts on a state mandate that says that a certain percentage of energy users must use energy efficient solutions by a certain date. The energy efficiency provider helps the energy provider accomplish this by offering attractive financing or other financial incentives to the customer. When the program is successful, the energy provider profits by receiving upstream financial incentives; the energy-efficiency provider profits by receiving midstream financial incentives and increasing its business; and the customer profits by implementing energy efficient design in an affordable fashion. In many cases, retrofitting a building through a DSM program can reduce implementation cost by 70 percent or more.

Companies that implement energy-efficiency retrofits through DSM programs may not have the same range of choices as companies that implement energy efficiency retrofits without DSM. But one of the retrofit options commonly chosen by DSM customers and non-DSM customers alike is lighting retrofits. When a company opts for energy-efficiency lighting, an energy-efficiency consultant performs a technical and financial analysis of it lighting system and presents a comprehensive lighting solution. Because the goal of energy efficiency is to reduce energy usage as much as possible, the solution will pertain to every aspect of a company’s lighting, from desk lighting to corridor lighting to exterior lighting. In addition to implementing energy efficient lighting fixtures, the consultant will also suggest implementing automated lighting controls that can adjust lighting according to work schedules, security measures, the presence of natural light, etc. If your company has an old lighting system that needs to be replaced but you don’t have the budget to pay for the changes in full, contracting with an energy efficiency provider through a DSM program may be the answer.

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