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Intermittent renewable energy resources such as, wind and photovoltaic (PV) plays a considerable role in today's power generation. In order to compensate this highly variable generation demand response is employed as a part of demand side management instead of costlier generation side spinning reserves. This capability can be achieved through responsive electric devices such as electric water heaters. Simulation model of the DR loads (heater) is mainly focused in a building considering the indoor and outdoor conditions. This paper presents a new approach for modeling flexible loads and aims to create further knowledge on the potentials of residential demand response concepts. The simulations are performed in MATLAB software.