As an important technique and measure for energy management, the demand side management (DSM) plays a key part in the operation of electricity market, and the extendibility and application of various saving electricity items is an important content of DSM. Aiming at problems of electric net in Hunan province, the paper establishes a set of cost and benefit analysis model of DSM with optimal theory in economics. By introducing examples, the paper mainly analyses green lighting, saving electricity of air condition and the frequency conversion adjust on the basis of benefit of society, user(participator),the electric power company(sponsors) and the supervisor(administrative department),and the economic incentive is suggested which should be adopted by electric power industry . At 10% rate, it can reduce the consumption of electric power and energy efficiently, and the potential of saving electric power is very huge.