In this paper, a three-step optimization approach is presented in order to obtain the optimal sizing of Standalone Photovoltaic (SPV) system. The main aim is to weigh the cost against the reliability of the system to make a smart design decision. The optimization approach has two objective functions to be minimized, Annual Lost Load (ALL) and Annual Life Cycle Cost (ALCC). The proposed method includes battery lifetime estimation, which is based on the active Depth of Discharge (DOD) of micro-cycles on the battery operation. The method has been applied to a remote area in Zambia. The results indicate that the introduced framework is capable of optimizing the system while satisfying the operational and economical requirements.