Electric power supply is one of the most important aspects of China’s national energy development strategy (NEDS). As major economic unit as well as major energy consumer, Jiangsu province is facing serious energy supply challenges. Under such circumstances, positive actions are taken by local government in respond to NEDS which put energy saving in the first place, and demand side management (DSM) is implemented. DSM is an important measure which can release rush hour electric supply pressure, enhance energy efficiency, optimize electric power utilization, and it is beneficial for sustainable development. This paper is based on the analysis of the current DSM situation of Nanjing, and green lighting is taken as an example. An empirical analysis is given to cost-effectiveness of the implementation of green lighting. Finally, the conclusion that the cost-effectiveness of the implementation of green lighting is economically viable to power supply companies, electric customers and the whole society is drawn.