The goal of this paper is to establish a framework for evaluating the marginal utility of adding smart sensing and metering hardware to residential premises, in terms of efficiency improvement (reduction in energy consumption) and economic benefits (reduction in energy cost). A simulation procedure is developed for experimenting with different types of hardware architectures. In-house analysis algorithms suitable to the installed suite of sensing and metering hardware are applied, which take into account realistic practical constraints. The proposed methodology allows us to perform a cost-benefit analysis of several potential smart home solutions. This analysis is meant to enable home owners to evaluate a priori the real cost saving potential of these solutions, when applied to their home.