In this study, we aim to develop a superstructure-based optimization model using mixed integer linear programming (MILP) to determine the optimal combination and sizing for a hybrid renewable energy system to be used in an isolated area. The developed model has a three-layered energy structure to reflect the current reality in which energy production and consumption sites are generally separate. A variety of economic factors, including distance between facilities and an installation area, are considered for a more accurate estimation of the total annualized cost. Two types of optimization models, i.e., with and without a battery, are proposed to evaluate the economic and technical effects of a storage device to resolve operation issues caused by intermittent resources. An application case study on Jeju Island, Korea, confirms that the proposed model is suitable for decision making at the planning stage of a renewable energy system. (C) 2016 Elsevier Ltd. All rights reserved.