VPP money trail · flat per device

Who gets paid a flat fee per smart thermostat

Follow one summer of PSEG Long Island’s Smart Savers program from Long Island customers to the utility, EnergyHub and 67,117 thermostat owners, and what the grid gets back.

VPP Economics has no affiliation with, sponsorship from, or endorsement by any utility, aggregator, platform, or device maker named here.

The short answer

  • Flat-per-device programs pay a set amount for each enrolled device, not for each kilowatt delivered. PSEG Long Island’s Smart Savers thermostat program paid $85 to join and $25 a year to devices that took part in at least half of events (PSEG Long Island).
  • In 2025 the program enrolled 67,117 thermostats and cost about $3.2 million, including incentives. Three three-hour events took 29.93 megawatts (MW) off the statewide peak hour, about 0.7 kilowatts (kW) per device.
  • The payoff is a lower capacity bill. PSEG Long Island estimates that peak reduction cut its 2026 capacity costs by about $1,296,757; with other benefits, its utility cost test ratio was 1.03.
  • This is event-based demand response (DR), not an orchestrated virtual power plant (VPP). The $25 is the same whether the grid calls one event or ten, and owners can override any event.
67,117enrolled thermostats, 2025
$25a device a year, plus $85 to join
0.7 kWaverage shed per device
29.93 MWoff the statewide peak hour

Money trail for one season of a flat-per-device thermostat program

Who pays whom for one summer of PSEG Long Island’s Smart Savers program, with the event signal and grid value. Inputs marked published or assumed.

Swipe to see the full chart →

MONEY TRAIL FOR ONE SUMMER SEASON (2025)WHO ULTIMATELY PAYSLong Islandelectricity customersFund the program through electricrates, alongside the capacitycosts it is meant to reduce.funds itvia retail ratesUTILITY · PROGRAM OWNERPSEG Long IslandRuns Smart Savers, calls eventsand pays owners directly by checkor bill credit.$3,200,000season cost, incl. incentivesPLATFORM · DEVICE MAKERSEnergyHub andthermostat cloudsEnergyHub enrolls, dispatches andmeasures; Nest, ecobee, Honeywelland others relay commands.≈$1,522,075all non-owner costs, assumedASSET OWNERThermostat ownersAbout 45,000 customers with 67,117devices; they accept a few warmerafternoons.≤$1,677,925$25 a device a yearratesfeespays owners directly: $85 to join, $25 a yearEVENT SIGNAL, VERIFICATION AND GRID VALUEState grid operator (NYISO)Sets PSEG Long Island’s capacitybill from load at the statewide peakhour.Event call3 island-wide events in 2025, 3hours each, on the hottestafternoons.Platform dispatchEnergyHub’s software sends setpointchanges through each thermostatmaker’s cloud.ThermostatsPre-cool, then raise the setpoint;0.7 kW less per device on average.Owners can override.eventsetpointdatapeakGrid value: 29.93 MW off the statewide peak hour on July 29, 2025 cut PSEG Long Island’s 2026 capacity costs by about $1,296,757.WHAT ONE THERMOSTAT IS WORTH, AND WHAT IT COSTSOne thermostat, one seasonPaid to the owneranniversary payment$25.00Capacity cost avoidedreport ÷ devices$19.32Total program cost$3.2M ÷ devices$47.68Per kilowatt (kW) per year, with reference pricesPaid to the owner$25 ÷ 0.7 kW$36/kWCapacity cost avoided÷ 29.93 MW$43/kWTotal program cost÷ 29.93 MW$107/kWRef: battery programConnectedSolutions$275/kWPer event: 0.7 kW × 3 hours = 2.1 kWh per thermostat; $25 over 3 events works out to about $3.97 per kWh shifted.Where the season’s $3,200,000 goesOwner payments, if every device earns $25$1,677,925 · 52%Sign-up bonuses, platform, marketing, evaluation$1,522,075 · 48%Utility cost test ratio 1.03: by PSEG Long Island’s own test, benefits — capacity, avoided investment and energy — roughly equal costs.HOW THE NUMBERS ARE BUILTPUBLISHED67,117 devices≈45,000 customersPUBLISHED0.7 kW per device3 events × 3 hPUBLISHED$85 to join, $25 a yearif 50% of eventsPUBLISHED$3,200,000 season costincl. incentivesPUBLISHED$1,296,757 capacity saved29.93 MW at peakASSUMEDEvery device earns $25≤ $1,677,925 to ownersGross payments, not profit: owners trade a few degrees of comfort for $25 a year; the program’s non-incentive costs are not itemized in the report.
Program figures from PSEG Long Island’s 2025 Dynamic Load Management Program Report: 67,117 enrolled thermostats, three three-hour island-wide events, 0.70 kW average shed per device, 29.93 MW at the statewide peak hour, an estimated $1,296,757 in 2026 capacity cost savings, about $3.2 million in 2025 costs including incentives, and a utility cost test ratio of 1.03 (PSEG Long Island). EnergyHub is the implementation contractor; the report does not say how EnergyHub or thermostat makers are paid. The split between owner payments and other costs assumes every device earned the $25 anniversary payment, an upper bound. Download the infographic (PNG).

Step by step

  1. Long Island electricity customers fund the program through rates. The same customers pay the capacity costs it reduces, so the test is whether savings exceed program spending (PSEG Long Island).
  2. PSEG Long Island, which runs the grid for the Long Island Power Authority, owns the program, calls the events and pays owners directly: $85 at enrollment and $25 on each anniversary if the device took part in at least 50% of events.
  3. EnergyHub implements the program on its Mercury distributed energy resource management system (DERMS). It enrolls devices, sends setpoint changes through each thermostat maker’s cloud and measures the results. The report does not say how EnergyHub or thermostat makers are paid.
  4. Thermostats pre-cool homes, then raise the setpoint for three hours. Average shed was 0.7 kW per device in 2025, down from 0.78 kW in 2024; owners can override.
  5. The state grid operator (NYISO) sets each utility’s capacity obligation from load at the statewide peak hour. Removing 29.93 MW at that hour on July 29, 2025 lowers PSEG Long Island’s 2026 capacity bill by about $1,296,757.

What a thermostat is worth here

Spread over 0.7 kW, the $25 payment is about $36 per kW a year; the whole program costs about $107 per kW and the capacity saved is worth about $43 per kW. Battery programs pay far more per kilowatt — ConnectedSolutions pays $275 per kW (Mass Save) — but each battery costs far more than a thermostat.

Per-device shed varies widely by climate and program design: NYSEG and RG&E reported 0.84 and 1.16 kW per thermostat (NYSEG and RG&E), SCE’s Smart Energy Program 0.92 kW (SCE), and ecobee cites about 0.65 kW across 143,000 devices (ecobee). A flat fee hides that spread from owners; the utility carries the performance risk.

What it means

Utilities

Utilities

Flat fees are cheap to administer and easy to market, and thermostats enroll by the tens of thousands. The cost is fixed whether or not events are needed, so value depends on hitting the one peak hour that sets capacity costs.

Program managers

Program managers

A pass-through to a platform such as EnergyHub keeps enrollment, dispatch and measurement in one place. Watch shed per device: a decline from 0.78 to 0.70 kW in one year cuts megawatts without cutting cost.

Aggregators

Aggregators

Thermostat fleets are large but shallow — under 1 kW each and limited to a few hours of comfort. They fit capacity-style DR well; they are less suited to daily, two-way market trading.

All six money trails

Per kW · one-way

PJM demand response event

Capacity is most of the value; owners get a contract share.

See the money trail →Per kWh · one-way

PG&E emergency event

$2 per kWh delivered, passed through to owners.

See the money trail →Flat per device

PSEG Long Island thermostats

You are here. $25 a year per device, however many events.

This pageTime-of-use · no program

SCE battery on a TOU rate

Bill savings from a price signal, not a dispatch.

See the money trail →Hosted hardware

Base Power home battery

The company owns the battery and keeps the grid value.

See the money trail →Two-way · orchestrated

ERCOT market-traded fleet

Traded every day; owners get a fixed credit.

See the money trail →

Method and caveats

Program figures are from PSEG Long Island’s 2025 report (PSEG Long Island). The split between owner payments and other costs assumes every enrolled device earned the $25 anniversary payment, an upper bound; new devices got $85 instead, and some devices missed the 50% threshold. Per-kW figures divide by the 29.93 MW measured at the statewide peak hour.

Gross program payments are not net profit: owners accept warmer afternoons, and the capacity value accrues to all customers through lower rates. Checked October 16, 2026.

Keep going

Money

How VPPs Make Money

Six ways VPP assets are monetized.

Read →Per kW

PJM Demand Response Money Trail

One event, paid per kW of capacity.

Read →On the bill

Time-of-Use Money Trail

Savings from a rate, not a program.

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