Building microgrids are motivated to use locally available renewable energy sources to get rid of conventional utility grid outages and dependency on fossil fuels. Unit sizing plays a vital role in the design of microgrid architectures. Proper combination of distributed units will lead to optimal system configuration in terms of overall system size and cost. The nature and number of units considered for microgrid formation will significantly effects the overall system sizing. The objective of this paper is to model a microgrid for buildings, which is technically feasible and economically optimal. The analysis is carried out for a case study with the practical data of a building located in southern India. This building is associated with priority load of 2.8 MWH/day at a peak demand of 435KW and deferrable load of 2.8MWH/day at a peak demand of 245KW. The power system is modeled and optimal system configuration was estimated with the help of HOMER. Sensitivity analysis is performed to understand the effect of various uncertainties on net present cost. © 2014 IEEE.