Optimization algorithms have been successfully used in maintaining the needs of the demand side management. Demand Side Management (DSM) is one of the important phenomena in Smart Grid and Transactive Energy Management systems which allows users to optimally schedule the operation of their residential appliances to maximize the cost benefits. In this article, a mathematical algorithm for the optimal scheduling of residential appliances is implemented. The proposed algorithm takes in the appliance’s power rating data, working hours, and time of use tariff as input. The operation of appliances was divided into 24 hours consisting of 144 slots where one slot equals 10 minutes. The operation of appliances was shifted from peak hours to off-peak hours based on the priority level of each appliance and the cost of electricity in the respective slots. This system also calculates the bill at the customer end. The proposed mathematical model can reduce costs up to $0.36 per day in electricity bills for the same amount of energy consumed before the implementation of the algorithm.

Keywords: Time of use Tariff, Transactive Home Energy Management System (THEMS), Load Shifting Algorithm, Energy Management, Demand Side Management, Home energy management system