In the stressful life, enhancing the quality of life at home is the need of the hour. Smart home automation is being incorporated with an intelligent system. Existing systems are creating major challenges in terms of cost and energy management. In a home network environment, keeping the sensors and devices always on consumes more electrical power and increases the cost paid for consumption of power. In the proposed work, energy management has been carried out with an intelligent algorithm. Image processing has a very big potential to do virtually anything. The challenges of cost have been overcome using image processing. Algorithm is developed for image processing-based appliance control system. The method proposed in this paper reduces the cost of sensors used in home automation. With image processing-based home automation there is less energy consumption, reduction in umber of sensors, and also optimized maintenance cost of home automation networks.