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Utilities and local power providers throughout the world have recognized the advantages of the "smart grid" to encourage consumers to engage in greater energy efficiency. The digitalization of electricity and the consumer interface enables utilities to develop pricing arrangements that can smooth peak load. Time-varying price signals can enable devices associated with heating, air conditioning, and ventilation (HVAC) systems to communicate with market prices in order to more efficiently configure energy demand. Moreover, the shorter time intervals and greater collection of data can facilitate the integration of distributed renewable energy into the power grid. This study contributes to the understanding of time-varying pricing using a model that examines the extent to which transactive energy can reduce economic costs of an aggregated group of households with varying levels of distributed solar energy. It also considers the potential for transactive energy to smooth the demand curve.