In the future power grid, a local electricity market (LEM) with renewable energy sources and a smart grid will play a key role. Consumers, prosumers and small distributed energy resources on the other hand, play an important role in local energy transactions. In the LEM under study, the system costs are decreased and prosumers are given additional incentives for exporting the power in the grid or LEM. This paradigm is designed to boost the willingness and engagement of customers in local electricity market, so empowering them to maximize their revenues. The suggested work combines customer segmentation and operating envelope to achieve both system cost reduction & customer profit maximization objectives. The optimization challenge also takes into account the performance of the system with and without LEM. A cost comparison of the system between various cases and scenarios yields positive findings. The impact of incentives on prosumers’ gross revenue is also examined. A system with 30 local participants makes up the test case system. By comparing the results of various scenarios and cases, minimum cost reduction of 0.2 % and maximum cost reduction of 25.8 % is achieved. While analyzing profit of players, incentive contributes a minimum 7 % and maximum 8 % in total revenue.