The incessantly growing demand for electricity in today's world claims an efficient and reliable system of energy supply. Distributed energy resources such as diesel generators, wind energy and solar energy can be combined within a microgrid to provide energy to the consumers in a sustainable manner. In order to ensure more reliable and economical energy supply, battery storage system is integrated within the microgrid. In this article, operating cost of isolated microgrid is reduced by economic scheduling considering the optimal size of the battery. However, deep discharge shortens the lifetime of battery operation. Therefore, the real time battery operation cost is modeled considering the depth of discharge at each time interval. Moreover, the proposed economic scheduling with battery sizing is optimized using firefly algorithm (FA). The efficacy of FA is compared with other metaheuristic techniques in terms of performance measurement indices, which are cost of electricity and loss of power supply probability. The results show that the proposed technique reduces the cost of microgrid and attain optimal size of the battery.