Internet of Things (IOT) is a megatrend of the 21st century. With the onset of smart devices and dependency on renewable resources, change in energy infrastructure has taken utmost priority as energy consumption of a residential sector accounts for a significant amount of total energy consumption and also contributes to global warming, which needs to be kept in check. In this paper, the proposed system aims to achieve a cost effective energy management system by a) Real-time monitoring of the loads and achieve demand forecasting based on acquired data for a certain period. b) Source management to satisfy the variable demand by parallel operation of sources. c) Overcurrent protection mechanism and load automation using IOT. © 2017 IEEE.