A context-aware smart home energy management (CASHEM) system and method is disclosed. CASHEM dynamically schedules household energy use to reduce energy consumption by identifying contextual information within said household, selecting a comfort of service preference, wherein said comfort of service preference is based on different said contextual information, and extracting an appliance use schedule for maximum energy savings based on said contextual information in light of said comfort of service preferences, by executing a program instruction in a data processing apparatus. CASHEM correlates said contextual information with energy consumption levels to dynamically schedule said appliance based on an energy-saving condition and a user's comfort. Comfort of service preferences are gathered by CASHEM by monitoring occupant activity levels and use of said appliance. CASHEM can also recommend potential energy savings for a user to modify comfort of service preferences.