With renewable energy based electrical systems becoming more prevalent in homes across the globe, microgrids are becoming widespread and could pave the way for future energy distribution. Accurate and economical sizing of stand-alone power system components, including batteries, has been an active area of research, but current control methods do not make them economically feasible. Typically, batteries are treated as a black box that does not account for their internal states in current microgrid simulation and control algorithms. This might lead to under-utilization and over-stacking of batteries. In contrast, detailed physics-based battery models, accounting for internal states, can save a significant amount of energy and cost, utilizing batteries with maximized life and usability. It is important to identify how efficient physics-based models of batteries can be included and addressed in current grid control strategies. In this paper, we present simple examples for microgrids and the direct simulation of the same including physics-based battery models. A representative microgrid example, which integrates stand-alone PV arrays, a Maximum Power Point Tracking (MPPT) controller, batteries, and power electronics, is illustrated. Implementation of the MPPT controller algorithm and physics-based battery model along with other microgrid components as differential algebraic equations is presented. The results of the proposed approach are compared with the conventional control strategies and improvements in performance and speed are Batteries have been integrated in microgrids to mitigate intermittent characteristics of alternative energy sources such as solar, wind, and wave, thereby enhancing grid operation and reliability.1,2 They are well suited for microgrid applications due to their versatility, high energy density, and efficiency. 3 The cost of batteries continues to decrease while their performance and life have continued to increase. 4 However, lithium-ion batteries, which are the most widely used energy storage systems implemented in microgrids today, are still the most expensive component, accounting for about 60% of the overall Capital Expenditure (CapEx).5 Conservative operations in current microgrids cause high cost and low energy efficiency, underutilizing and overstacking batteries. The current microgrid controls cannot utilize batteries aggressively to achieve high penetration of renewables and maximize life and usability of batteries in the meantime. They implement empirical/equivalent-circuit battery models, treating batteries as just a black box, which does not account for its internal states, and place batteries in a small portion of the entire microgrid, which means current microgrids do not consider batteries principal components. [6][7][8][9][10] For example, if the internal temperature of the battery is not modeled, then the battery must be operated at very low rates to ensure that the internal temperature does not reach high enough values that reduce battery life and create unsafe operating c...