A method for controlling an energy storage unit having a model which tracks each charging instances includes, for each charging event, capturing energy charged into the energy storage unit and an unit energy price of the charging source(s) at the time of charging; updating a unit price of total energy stored in the storage unit at each time-step; during a discharging event, updating the unit price of energy in the storage unit on a selected cost model; comparing the unit price of energy in the storage unit with other generation sources in the microgrid and a utility tariff; selecting a lowest cost combination from generation, storage, and grid and using the lowest cost combination to supply a load; and if a controller decides to use stored energy at any time, sending a discharge command to the energy storage unit.