This dissertation combines methods from engineering, operations research, and economics to analyze how emerging residential energy technologies can be effectively used to reduce both energy costs and carbon emissions. Our most important finding is that air-source heat pumps can be used to reduce both energy costs and carbon emissions in four out of the five major climate regions studied, but that electric retail rate reform is needed to provide customers with appropriate incentives. In cold climates, it may be advantageous to use heat pumps in tandem with fossil fuel-powered furnaces; in warmer regions, furnaces can be cost-effectively abandoned altogether. We do not find that distributed rooftop solar panels or distributed battery storage are effective tools for reducing the cost of energy services. Rather, in our simulations, customers adopt these technologies in response to poor price signaling by electric utilities. By reforming electric retail rates so that the prices paid by consumers better reflect the cost of energy services, utilities can promote the adoption of technologies that reduce both aggregate costs and carbon emissions.