Advent of modern sensing technologies, data processing capabilities and rising cost of energy are driving the implementation of intelligent systems in buildings and houses which constitute 41% of total energy consumption. The primary motivation has been to provide a framework for demand-side management and to improve overall reliability. The entire formulation is to be implemented on NILM (Non-Intrusive Load Monitoring System), a smart meter. This is going to play a vital role in the future of demand side management. Utilities have started deploying smart meters throughout the world which will essentially help to establish communication between utility and consumers. This research is focused on investigation of a suitable thermal model of residential house, building up control system and developing diagnostic and energy usage forecast tool. The present work has considered measurement based approach to pursue. Identification of building thermal parameters is the very first step towards developing performance measurement and controls. The proposed identification technique is PEM (Prediction Error Method) based, discrete state-space model. The two different models have been devised. First model is focused toward energy usage forecast and diagnostics. Here one of the novel idea has been investigated which takes integral of thermal capacity to identify thermal model of house. The purpose of second identification is to build up a model for control strategy. The controller should be able to take into account the weather forecast information, deal with the operating point constraints and at the same time minimize the energy consumption. To design an optimal controller, MPC (Model Predictive Control) scheme has been implemented instead of present thermostatic/hysteretic control. This is a receding horizon approach. Capability of the proposed schemes has also been investigated.