Abstract Demand-side management (DSM) schemes play a crucial role in managing renewable energy generation and load fluctuations by utilizing demand–response programmes (DRPs). This paper aims to provide a detailed overview of DRPs that help microgrid operators to keep costs and reliability within acceptable ranges. Additionally, this review paper provides a detailed economic load model for DRPs based on initial load, demand–response (DR) incentive, DR penalty and elasticity coefficients. This article also aims to guide researchers in identifying research gaps in DSM applications in microgrids by comparing various DSM schemes from different countries and regions in terms of DSM strategies, objective functions and optimization techniques. Furthermore, this study analyses the impact of DRPs on microgrid configuration from the perspective of utilities and customers, considering technical and economic performance metrics. As a result, it can be concluded that none of the studied cases provides models or guidelines for choosing appropriate DSM schemes that consider different consumer interests or load-type features. Furthermore, a few researchers have addressed the features of a modern price-based DR strategy, renewable generation-based dynamic pricing DR, which offers higher customer satisfaction than traditional DRPs.