Abstract: With the continuous development of electric power technology, the forms of electricity use are gradually dispersed and diversified. The island microgrid uses the advantages of clean and recyclable renewable energy to solve the problem of inconvenient electricity in remote areas such as islands and borders, and the island microgrid of wind and firewood storage is widely used. However, both photovoltaic power generation and wind power generation have randomness. In order to ensure the reliability of power supply, it is necessary to have a reasonable capacity of wind solar diesel, and storage to ensure the stable operation and economy of the microgrid system. Based on the actual project, this paper carried out research on capacity optimization of microgrid, adopted a lithium battery energy storage system with high energy density, high charge and discharge efficiency, and fast response speed, built a life cycle model of microgrid system based on stability constraints, new energy permeability constraints, energy storage charge state constraints, and power constraints, and used particle swarm optimization algorithm to solve it. To verify the rationality and feasibility of the microgrid capacity optimization allocation method.