In South Africa, the residential sector currently contributes more than 20% to the national peak electricity demand. A large part of this demand is attributable to space heating on cold winter days. The fact that this load shows adverse seasonal and diurnal load factors (peak to average load), makes this end-use a natural target for a demand side management program. This paper proposes a program for thermal efficiency in the South African residential sector. The program is aimed at load factor improvement as well as energy conservation. Important local considerations for the establishment of a viable program are discussed and the likely impacts of various scenarios are estimated. The two largest conservation opportunities which can be identified in the current South African situation are: (i) better envelope insulation and (ii) improved insulation for the hot water reticulation system. Three future scenarios are investigated in detail. They are: (A) promotion and awareness campaign only, (B) promotion and an interest-free loan as incentive and (C) promotion, loan and enforced minimum standard for new housing. The savings impact and cost of these scenarios are estimated. Scenario C, which includes a minimum standard which is enforced by law, is the most effective. It is predicted to yield an energy saving of around 1000 GWh/year and a peak load reduction of 550 MW by the year 2010.