There is a question every co-op has to answer before it runs a demand response or battery program, and it is harder to answer than it should be. When will this program actually benefit our members?
Most co-ops answer it with a spreadsheet built from scratch, a few vendor quotes, and a fair amount of guessing. That works until it does not. And the place it breaks first is the very first input: how many controllable devices are actually out there.
Why co-ops undercount controllable devices (and why it kills programs)
Ask a co-op how many home batteries are in its territory and you will often hear a number like five. The real number is frequently over a hundred. The same gap shows up with EVs, smart thermostats, and water heaters. Adoption has outrun what the co-op can see, so the co-op guesses, and in our experience, the guesses run low. Behind-the-meter battery additions in the US have been climbing year over year, and most of that sits behind the meter where it is hard to see from the office.
That single low guess is enough to end a program before it starts. If you think you have five batteries, there is no program worth running. If you can see that you have a few hundred, the math changes completely.
So the first job is not modeling. It is getting the device count close to reality, using what you can actually pull: AMI signatures, interconnection records, rebate history, and OEM data for your territory. Start from real adoption, not a hunch.
How Vermont Electric Cooperative built a bring your own battery program with 12+ OEMs that saved over $400,000 for members. --> Read the case study
How to model demand response economics in 5 steps
Once you have a realistic count, the economics are a sequence of decisions, not a mystery. A good model makes each decision visible and lets you change it. Here is the path it walks you through.
1. Start with the device mix. Thermostats, batteries, EVs, water heaters, electric thermal storage, commercial generators, utility-scale storage. Each contributes a different amount of controllable load, and the distinction that matters is between the kilowatts a device draws and the kilowatts you can actually control. A battery is worth roughly seven times a thermostat for this reason. Sizing the pool means choosing the mix and the counts that add up to the controllable capacity you need. These values are also largely determined by the duration of the peaks you are running. A thermostat is not going to give you 1 kW for a full 3 hours but it will for one hour.
2. Set the value of a kilowatt. This is the heart of it. What does a kilowatt of peak cost you, usually as a G&T demand charge or a regional capacity value, expressed per kilowatt per year. That number is what every controllable kilowatt in your pool is worth avoiding, and a federal study on the value of demand response and storage shows it can be substantial, though the right figure for your system is yours to pin down.
3. Decide on how you will compensate members. A program only works if members participate, and participation costs money, upfront, monthly, or both. A useful rule of thumb is that about half the value ends up with the participating member and the rest is your benefit. The point is that you set this yourself and watch it move the result.
4. Then add the software and program costs. The platform fee, the per-device cost, anything else. This is where comparing vendors belongs, on the same sheet as everything else, rather than buried in four separate quotes.
5. Now you're able to look at it over time, from year one and across ten years, with a growth assumption as you enroll more devices each year. The question stops being "does this feel worth it" and becomes "we are positive in year one, and here is the ten-year number."
Setting the value of a kilowatt: the heart of the model
The reason to model it this way is that you should not commit to a program on a hunch or a guess. Every assumption in the model is yours to set and yours to defend. Especially when you submit to the regulators or when you walk into a board meeting. You are bringing a number you built, with the inputs in plain view, that someone can challenge and that you can answer.
It also lets you make the calls that actually decide a program. How much to pay members. Which device types to chase first. Whether a bring-your-own-device structure pencils out against buying the hardware yourself or handing it to a third party. Those are not vendor questions. They are your questions, and a model is where you answer them before any money is on the line.
FranklinWH & Texture begin solar-and-storage installs with Ann Arbor Sustainable Energy Utility with goal of installing solar-plus-storage on about 150 homes in 2026 and up to 1,000 homes in 2027 --> Read the case study
Member incentives, software costs, and net benefit over time
A DER program lives or dies on a few numbers: how many controllable devices you really have, what a kilowatt is worth to you, what you pay members, and what the software costs. The gap has always been that those numbers lived in a one-off spreadsheet, started from a guess, and were hard to defend. Model them honestly, start from real device counts instead of a low guess, and you can size the program and prove it pays before you commit to anything.
We built a model that walks through exactly this. It is built to be adjustable, so you can change every assumption and run your own scenarios, at texturehq.com/economic-model.
