Optimizing residential energy consumption: the need for pareto optimality

The success of the smart grid will depend on the widespread participation of users. The potential for profit and the cost saving features of smart grids are excellent motivating factors to involve users in the smart grid implementation. At the same time, users do not want to be extensively involved in optimizing their energy usage. In this paper, we review various optimization methods proposed in the literature to optimize end-user´s energy consumption. We then briefly describe a comprehensive optimization model we developed to automate decisions about minimum cost energy consumptions and discuss a simple 2-household case study. The case study demonstrates that it is important to consider pareto-optimality and discusses our solution to this requirement.