This research aims to increase efficiency in the Israeli electricity market by introducing a program to influence demand known as a DSM plan, or demand-side management, especially directed toward the residential sector.

Since the establishment of the State of Israel policy makers have held the view that Israel Electric Corp. (IEC) should supply all electricity demand. This mandate led to a huge increase in IEC’s electricity production capabilities over the years, but the increased capacity has not been used efficiently. Due to the volatility of the market and inability to store electricity, just half of IEC’s production capabilities were required to supply the total annual electricity needed in 2010.