Technological advances such as IoT have provided a foundation for smart environment that are capable of self-adjustment to the needs of users. As the consumption of resources becomes faster and faster, control of energy in these facilities is a key to optimizing the effectiveness of ecosystems and for the advantage of consumers and utilities. This review examines various management techniques with emphasis on the peak load shaving and demand response, which are critical in managing energy efficiency and stability. Hence, it focuses on important benefits such as lower energy consumption and improved stability of the electricity supply in the grid, as well as threats like high installation costs, the absence of a unified approach to implementing smart homes, and user acceptance. It provides a broad understanding of the current trends, also focuses on the current practices, and also explores future trends and prospects. Thus, it is informative for researchers and practitioners involved in IoT development, integrating the latest findings and acknowledging ongoing difficulties, which create the basis for upcoming studies focused on eliminating obstacles and utilizing IoT effectively for efficient and sustainable energy management.