Explainability is crucial for complex systems like pervasive smart environments, as they collect and analyze data from various sensors, follow multiple rules, and control different devices resulting in behavior that is not trivial and, thus, should be explained to the users. The current approaches, however, offer flat, static, and algorithm-focused explanations. User-centric explanations, on the other hand, consider the recipient and context, providing personalized and context-aware explanations. To address this gap, we propose an approach to incorporate user-centric explanations into smart environments. We introduce a conceptual model and a reference architecture for characterizing and generating such explanations. Our work is the first technical solution for generating context-aware and granular explanations in smart environments. Our architecture implementation demonstrates the feasibility of our approach through various scenarios.