  The benefits of shifting to renewable energy sources have granted microgrids
considerable attention, especially photovoltaic (PV) systems. However, given
the inherent variable and intermittent nature of solar power, battery energy
storage systems (BESS) are pivotal for a reliable and cost-effective microgrid.
The optimal sizing and energy scheduling of PV and BESS pose significant
importance for minimal investment and operational cost. The associated costs of
degradation for both these sources further add complexity to the overall
planning problem. This paper proposes a microgrid resource planning model for
determining the optimal PV and BESS sizes in combination with natural gas
generators, considering their technical and financial characteristics as well
as the degradation costs of both PV and BESS. Its objective is to minimize the
microgrid-wide total operational and capital cost. The optimization model is
formulated using mixed-integer linear programming to ensure the resource sizing
problem converges with a reasonably small optimality gap. In addition, an
iterative post-optimization BESS degradation cost correction algorithm is
proposed for enhanced accuracy. The results showcase the savings in the overall
objective cost and reductions in solar energy curtailment upon BESS's
inclusion.
