An energy management system (EMS) that achieves optimal operation by combining heat sources with different characteristics and using energy interchanges between residential dwellings was developed. Commercial fuel cell combined heat and power (FC-CHP) systems and CO2 heat pump water heaters (CO2HP) with high generation efficiencies have penetrated the Japanese residential market. In this real environment, the types or models of the installed heat sources vary between residential dwellings, and their energy demand is unknown. The EMS predicts energy generation and consumption and develops an optimum operational strategy that it uses to control energy equipment. It also continually revises the strategy and adjusts equipment controls to reflect actual conditions. The EMS is evaluated using a case study of a group of four residential dwellings with two different heat sources. Subsequent quantitative analysis shows that the EMS reduced energy costs by 10%. A sensitivity analysis also confirmed that it operates optimally even when energy prices are changed. (C) 2018 Elsevier Ltd. All rights reserved.