A method and system architecture for automation and alarm systems is provided. According to exemplary embodiments, relatively simple processing tasks are performed at the sensor level, with more complex processing being shifted to the gateway entity or a networked processing device. The gateway entity dynamically allocates processing resources for sensors. If a sensor detects than an event is occurring, or predicts that an event is about to occur, the sensor submits a resources allocation request and a power balancer running on the gateway entity processes the request. In response to the resources allocation request, the gateway entity allocates some processing resources to the requesting sensor and the data is processed in real-time or near-real-time by the gateway entity.