The grid is under more pressure than it has been in decades as electricity demand rises and extreme weather events intensify. Yet the infrastructure we need to keep the lights on was built for a different era.
Most conversations about grid resilience focus on the supply side—new generation capacity, battery storage, or transmission upgrades. These are certainly investments that matter, but reflect a longer-term strategy that will take years and billions of dollars to materialize.
What doesn't get enough attention is the demand side today, and specifically what's sitting idle inside every commercial, multifamily, or hospitality building in North America right now.
HVAC is the single largest energy load in most buildings, typically accounting for 40–60% of their total power consumption. It runs continuously, responds to occupancy and weather, and in most properties, operates on a fixed schedule set years ago by whoever commissioned the system.
It has no awareness of what the grid is doing at any given moment. It just runs, suspended in time, unreactive to rising energy prices or supply constraints. This sounds problematic and can indeed be costly. But it also presents an opportunity.
Unlike most proptech solutions that rely on operator input, advanced software approaches can automate existing HVAC systems in real time.
This approach bypasses dashboards, alerts, and manual intervention, instead actively managing load and optimizing performance in real time. It requires no rip-and-replace, no new hardware, and minimal reliance on on-site teams.
Existing HVAC equipment, BMS infrastructure, and metering systems can all be tapped and fed live data, which calibrates load intelligently.
These systems can shift or reduce consumption when grid demand is highest, without compromising occupant comfort.
Software-driven HVAC systems that align load with low-cost energy periods can create demonstrable reductions in both energy costs and carbon exposure while placing less strain on the grid. Data suggests optimization can reduce peak power demand by more than 25% during cooling operations, for example.
Last summer, during a heatwave that pushed New York City's grid to 99% capacity, buildings were able to automatically curtail over a megawatt of HVAC load across three days.
Residents felt nothing, and the grid got the relief at the moment it needed it the most.
In this model, HVAC systems become grid-interactive assets that can improve efficiency while creating potential revenue opportunities.
Traditional building operations create demand spikes during peak periods that strain the grid and drive energy prices higher across the market.
The demand pressures bearing down on the grid aren't temporary, but structural. Cooling demand is rising as summers intensify—the U.S. Energy Information Administration projects electricity demand for air conditioning will increase significantly through 2050 as average temperatures climb.
Electrification is accelerating that pressure further, as heat pumps, EV charging, and electric appliances shift load onto a grid that wasn't designed to absorb it all at once.
And AI is adding a demand category that barely existed five years ago—data centers now account for roughly 2% of U.S. electricity consumption, a figure that is expected to double by the end of the decade as the tech’s workloads scale.
A grid-aware building inverts that dynamic. Rather than consuming at peak, it absorbs load during off-peak periods and reduces demand when the grid is under pressure—functioning, in effect, as a distributed flexibility resource.
According to Memoori's 2024 market analysis, the global market for energy management software in grid-interactive buildings is projected to grow from approximately $3 billion to nearly $5 billion by 2029.
Regulatory pressure and increasing grid constraints are driving that growth, as is the growing recognition that buildings are dispatchable assets, rather than passive infrastructure.
The technology exists and the economics work, but what's missing is the policy architecture to unlock this building flexibility at scale.
Utilities need demand response programs that are accessible to multifamily and hospitality properties, not just industrial facilities. Rate structures, meanwhile, should reward buildings that curtail load during peak events as much as they do those with on-site generation.
As policymakers design compliance frameworks, such as Local Law 97, they should consider grid-interactive performance as a qualifying pathway rather than an afterthought.
In theory, there is very little to stop this: the buildings are already there, the systems are already running, and the need for flexibility has never been more pressing. We simply cannot wait ten years for new generation capacity to come online.
Software can make existing building infrastructure responsive to real-time grid conditions today,
often at lower cost and with faster deployment than hardware-heavy alternatives.
For building operators, adopting these systems may be one of the more immediate and practical steps available to improve performance today while preparing for future grid demands.
Brad Pilgrim is the CEO and Co-Founder of Parity, a leading HVAC optimization company that transforms multifamily buildings and hotels into grid-interactive assets. Parity switches HVAC systems to autopilot to reduce energy costs and improve building operations, all while enabling buildings to maximize revenue through demand response.
