The supplier becomes the latest – and the largest – to sign up to the scheme, which is run by National Grid.
But its ambitions for numbers taking part are lower than Octopus Energy, which has so far signed up more than 400,000 customers to its version of the scheme.
Customers with smart meters will be sent emails asking them if they want to take part, British Gas said.
“The electricity grid is facing increased pressure and smart technology plays a key role in managing peak demand,” said chief executive Chris O’Shea.
"Reducing consumption has the added benefit of helping consumers save on their energy bills.
“We are exploring how to make this scheme work best for our customers so that it fits in with their habits around the home.
“This approach to help manage residential electricity demand is likely to become a major feature of the market in years to come."
Mr O'Shea said the supplier would use what it learnt from the initial phase to introduce the scheme to its wider customer base.
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Under the scheme, households will be paid about £4 ($5) for every unit of electricity that cut back on during specific times.
Households will be sent a text by 6pm the day before to let them know when to switch off their ovens and TVs and go for an hour-long walk.
They can then return and use their electricity as normal. There is no obligation to take part.
For a household it means moving the time that you turn on certain appliances, rather than not switching them on at all.
It could mean that for switching your oven on an hour later than normal you are paid £4.
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For the energy grid it is also good news. It can tap into these households on days when there will be enough electricity for everyone to do what they need, but perhaps not all at the same time.
If the grid is able to ask people to reduce their consumption during certain hours, it will not need to pay exorbitant amounts for electricity from other sources, such as France.
British Gas’s decision comes just days after the scheme was almost run live for the first time since it was launched this month.
There have been three tests of the system so far.