The Association of Home Appliance Manufacturers defines smart appliances as appliances which monitor, control and protect their electrical energy usage in response to customer needs. Smart appliances can sense their energy consumption, enable residents to view whole home energy usage, and provide feedback and advice on their energy use.

Smart appliances will play an essential role in the smart grid by facilitating large-scale residential demand response. By making residential appliances more efficient and shifting their usage from peak to off-peak periods, peak and average electricity usage will be cut. Lower peak loads, in addition to reducing long-term investment in expensive generation, will improve the health and stability of the power grid.

The relatively low adoption rates for residential demand response can be attributed to the lack of automated appliance demand response. Users will not modify their appliance usage patterns if the process is too inconvenient, complex or obtrusive. They also lack the motivation to track real-time power pricing in order to optimize their energy usage. This demonstrates the need for the automated and unobtrusive appliance management capabilities that smart appliances will offer.

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