This study examined and compared two energy storage technologies, i.e. batteries and pumped hydro storage (PHS), for the renewable energy powered microgrid power supply system on a remote island in Hong Kong. The problems of energy storage for off-grid renewable energy were analyzed. The sizing methods and economic models were developed, and finally applied in the real project (case study). The results provide the most suitable energy storage scheme for local decision-makers. The two storage schemes were further divided into 4 options. Accordingly, the life-cycle costs (LCC), levelized costs for the renewable energy storage system (LCRES) and the LCC ratios between all options were calculated and compared. It was found that the employment of conventional battery (Option 2) had a higher LCC value than the advanced deep cycle battery (Option 1), indicating that using deep cycle batteries is more suitable for a standalone renewable power supply system. The pumped storage combined with battery bank option (Option 3) had only 55% LCC of that of Option 1, making this combined option more cost-competitive than the sole battery option. The economic benefit of pumped storage is even more significant in the case of purely pumped storage with a hydraulic controller (Option 4), with the lowest LCC among all options at 29-48% of Option 1. Sensitivity analysis demonstrates that PHS is even more cost competitive by controlling some adjustments such as increasing energy storage capacity and days of autonomy. Therefore, the renewable energy system coupled with pumped storage presents technically feasible opportunities and practical potential for continuous power supply in remote areas. (C) 2013 Elsevier Ltd. All rights reserved.