This paper evaluates the potential energy use and peak demand savings associated with optimal controls of switchable transparent insulation systems (STIS) applied to smart windows for US residential buildings. The optimal controls are developed based on Genetic Algorithm (GA) to identify the automatic settings of the dynamic shades. First, switchable insulation systems and their operation mechanisms are briefly described when combined with smart windows. Then, the GA-based optimization approach is outlined to operate switchable insulation systems applied to windows for a prototypical US residential building. The optimized controls are implemented to reduce heating and cooling energy end-uses for a house located four US locations, during three representative days of swing, summer, and winter seasons. The performance of optimal controller is compared to that obtained using simplified rule-based control sets to operate the dynamic insulation systems. The analysis results indicate that optimized controls of STISs can save up to 81.8% in daily thermal loads compared to the simplified rule-set especially when dwellings are located in hot climates such as that of Phoenix, AZ. Moreover, optimally controlled STISs can reduce electrical peak demand by up to 49.8% compared to the simplified rule-set, indicating significant energy efficiency and demand response potentials of the SIS technology when applied to US residential buildings.