The transformation of passive to energy-active consumers in smart homes has been enabled by the proliferation of distributed energy resources (DERs) and demand-side management technologies. Building a smart community-based electricity market (SCEM) centred around a local energy community has the potential to expedite this transformation by tapping the flexibility associated with peer-to-peer energy transactions inside the community. The article presents a systematic approach to quantifying the benefits of smart homes, starting from the energy-passive to energy-active homes under SCEM with intermediate stages identifying smart homes with DERs. The investigation also includes the impact of seasonal variations with contrasting characteristics. Smart homes with solar PV and energy storage under SCEM achieve maximum savings of 50% and 36.6% for the summer and winter months, respectively, and SCEM boosts consumption of localized green energy by a further 31% in the summer month. ES leverages the smart homes gain significantly through self-consumption and energy arbitrage. However, the operation of ES under SCEM in the winter month reduces the network’s voltage stability. The article is conducted based on real-life measurements from an energy community in Ireland. Recommendations are made further to boost the transition of smart homes toward the decarburization of smart grid networks.