It is essential to maintain the balance of supply and demand of electricity. With the increasing penetration of renewable energy on the power grid, maintaining this balance has become more challenging for grid operations. Residential buildings are a vital tool for demand-side management (DSM). Traditional approach of a program like demand response, poses a challenge of rebound-effect. The rebound-effect causes either demand shifting or amplifies the original system peak. This paper proposes two methods to mitigate these rebounds. The first method uses the battery energy storage system, and the second one uses an electric water heater to behave as thermal energy storage devices. These devices are operated strategically to mitigate the rebound-effect. Algorithms for the operation were developed in-house and benchmarked against demand-response methods. The observed results indicate that both the proposed methods effectively mitigate the system rebounds.