Computer simulation is an increasingly popular tool for determining the most suitable hybrid energy system type, design and control for an isolated community or a cluster of villages. This paper presents the development of the optimum control algorithm based on combined dispatch strategies, to achieve the optimal cost of battery incorporated hybrid energy system for electricity generation, during a period of time by solving the mathematical model, which was developed in Part I of this tri-series paper. The main purpose of the control system proposed here is to reduce, as much as possible, the participation of the diesel generator in the electricity generation process, taking the maximum advantage of the renewable energy resources available. The overall load dispatch scenario is controlled by the availability of renewable power, total system load demand, diesel generator operational constraints and the proper management of the battery bank. The incorporation of a battery bank makes the control operation more practical and relatively easier. (c) 2010 Elsevier Ltd. All rights reserved.