The ESPI method for surface deformation measurements requires the use of a light source with high coherence length to accommodate the optical path length differences present in the apparatus. Such high-coherence lasers, however, are typically large, delicate and costly. Laser diodes, on the other hand, are compact, mechanically robust and inexpensive, but unfortunately they have short coherence length. The present work aims to enable the use of a laser diode as an illumination source by equalizing the path lengths within an ESPI interferometer. This is done by using a reflection type diffraction grating to compensate for the path length differences. The high optical power efficiency of such diffraction gratings allows the use of much lower optical power than in previous interferometer designs using transmission gratings. The proposed concept was experimentally investigated by doing in-plane ESPI measurements using a high-coherence single longitudinal mode (SLM) laser, a laser diode and then a laser diode with path length optimization. The results demonstrated the limitations of using an uncompensated laser diode. They then showed the effectiveness of adding a reflection type diffraction grating to equalize the interferometer path lengths. This addition enabled the laser diode to produce high measurement quality across the entire field of view, rivaling although not quite equaling the performance of a high-coherence SLM laser source.