This paper introduces a day-ahead energy management algorithm for the coordination of smart homes with renewable energy sources and energy storage systems in neighborhood areas. The aim of this study is to establish a day-ahead decentralized coordination method with appliance scheduling and energy sharing (among smart homes) to minimize the electricity bills of consumers under dynamic pricing. The energy sharing algorithm focuses on increasing the utilization of renewable sources by controlling storage units. A multi-agent system is used to model entities (smart homes, aggregator and utility) as agents and the optimization problem is solved in a decentralized manner by home agents with a genetic algorithm. The performance of the coordination algorithm is evaluated annually with and without considering forecasting errors.

Grid modernization through philosophies such as the Smart Grid has the potential to meet increasing demand and integrate new distributed generation resources at the same time. Using advanced communication and computing capabilities, the Smart Grid offers a new avenue of controlling end-user assets, including small units such as home appliances. To enable such evolution, shifting from centralized to decentralized control strategies is required. Effective demand-side management (DSM) and demand response (DR) approaches hold the promise for efficient energy management in homes and neighborhood areas, by enabling the precise control of resources to reduce net demand. However, with such strategies, independently taken decisions can cause undesired effects such as rebound peaks, contingencies, and instabilities in the network. Therefore, the interactions between the energy management actions of multiple households is a challenging issue in the Smart Grid. This paper provides a review of the background of residential load modeling with DR and DSM approaches in a single household and concepts of coordinating mechanisms in a neighborhood area. The objective of this paper is to classify, via comparison, the various coordination structures and techniques from recent research. The results of recent research in the field reveal that the coordination of energy management in multiple households can benefit both the utility (i.e., the service provider) and the customer. The paper concludes with a discussion on the prevalent critical issues in this area.