Driving Adoption of Demand-Responsive Commercial Lighting with a Clarified Value Proposition: Site Level Energy Savings and Cost-Benefit Analysis

Commercial lighting represents a significant potential source of demand response (DR) for the electrical grid, via traditional load shedding and also via rapid-dispatch (“fast-DR”) ancillary services when DR is enabled by networked lighting controls (NLCs). Since 2013, California Title 24 building code mandates DR-capable lighting in certain circumstances. Despite the significant opportunity and regulatory push, DR-enabled lighting is installed and enabled in a relatively small number of buildings because most building owners do not see a strong value proposition from DR-enabled lighting. While NLCs can support DR enablement by providing additional capabilities that deliver value to the customer such as reduced energy bills, optimized space utilization, and increased revenue, these co-benefits from NLCs are not well quantified. This paper undertakes a detailed analysis of lighting DR resources and energy-related co-benefits for commercial buildings in California. Using over 100,000 individual hourly load profiles, we forecast the potential DR resources that could be available from commercial lighting in 2025. We also estimate the revenues available from participation of these DR resources in energy markets. Combining these results with field-study estimates for NLC installation costs and energy savings, we perform a detailed accounting, by building type, of the site-level costs and energy-related co-benefits arising from DR enablement with NLCs. In many cases, the energy savings alone can deliver significant net value to the site, strongly justifying the adoption of NLC-enabled DR. A companion paper considers the additional non-energy benefits, which can be even larger than the energy benefits.