Small renewable energy solutions such as solar home lighting system (SHLS) provide reliable electricity supply to off-grid bottom-of-pyramid (BoP) households and thereby improve status of living. Commercial SHLS employs polycrystalline silicon photovoltaic (PV) and flooded lead–acid battery technologies for energy generation and energy storage, respectively. Flooded lead–acid battery is a 150-year-old, mature and inexpensive energy storage technology but has a short lifetime. In SHLS, flooded lead–acid battery requires replacement every 4–5 years and can cost up to 70% of the total cost over the 20 years lifetime of the system. In this paper, seven advanced lithium-ion battery chemistries were evaluated as a potential replacement for flooded lead–acid battery in SHLS using HOMER microgrid software. Three lithium-ion battery chemistries – NCA, LFP and LFP/LTO – were found to be viable alternatives based on economic and performance metrics. The three lithium-ion battery based SHLS showed comparable initial capital cost to that of the commercial SHLS but provided significant advantage over the system lifetime as no/fewer battery replacements were required, which resulted in a total net present cost (TNPC) that was as low as 45% of the commercial SHLS. Price of lithium-ion battery technology is decreasing at 8–16% annually in real terms and the cost advantage of SHLS based on lithium-ion battery is expected to increase significantly in the future.