The Paris Agreement seeks to limit global temperature rise and achieve climate neutrality by 2050. The UN's Sustainable Development Goal 7 emphasizes sustainable energy access, with smart grids playing a crucial role. These grids adapt to user behavior and interconnect various components. While smart grids address challenges in integrating renewable energy, their complex socio-technical nature demands a multidisciplinary approach. Institutions are vital in smart grid development, but their importance often goes unnoticed. The interplay of stakeholders, technology, and institutions complicates smart grid implementation. Although existing research largely focuses on technical aspects, a holistic approach considering social, economic, environmental, and institutional dimensions is essential. This study aims to bridge this gap by employing the Institutional Analysis & Development (IAD) framework to enhance the Netherlands' electricity/energy system design, particularly at the community level, concerning the impacts of institutional rules on smart grid development and implementation. The chosen research approach is a comparative case study, focusing on smart grid integration in the Netherlands. The Institutional Analysis and Development framework aids in analyzing complex socio-technical systems, particularly energy transitions and smart grids. Three cases were examined: Schoonschip Amsterdam, GridFlex Heeten, and Groene Mient The Hague. Data collection involved literature review and 14 semi-structured interviews with experts and stakeholders. Interview data was deductively coded using the IAD framework, facilitating comparative case analysis and cross-case analysis using the ASI diagram (Actors, System & Institutions). The transition of the Dutch electricity system into a competitive liberalized market has increased the importance of smart grids for sustainability. Decentralized energy production, facilitated by smart grids, requires technological advancements and institutional changes at various levels. Successful smart grid implementation in the Netherlands involves obtaining exemptions, feasibility studies, and engaging legal entities like homeowners' associations and energy cooperatives. Cases emphasized the significance of pre-exemption feasibility studies, technological requirements, stakeholders like Distribution System Operators, and energy management systems. The findings highlight the uniqueness of each case and the role of institutional rules. In Schoonschip, boundary, position, choice, and payoff rules were pivotal. GridFlex highlighted position, choice, information, and scope rules. Groene Mient showcased boundary, position, choice, payoff, and scope rules. These case studies underscore complexities in decision-making and governance within smart grid initiatives. Successful implementation requires considering technology, institutions, and stakeholders as indicated by the ASI diagram. The IAD framework analysis reveals the impact of biophysical conditions, community attributes, and rules-in-use on smart grid outcomes. Recommendations include further research on evolving rules, understanding actor positions, interdisciplinary research, integrated decision-making frameworks, empirical case studies, and policy recommendations such as financial support, clear policy roles, local smart energy systems, positive framing, standardized data exchange, and umbrella organizations for cohesive local smart grid projects. In conclusion, the study underscores the intricate nature of smart grid implementation, emphasizing the need for comprehensive consideration of technology, institutions, and stakeholders. The IAD framework sheds light on the complex dynamics, guiding effective decision-making and policy formulation for successful local smart grid development.