The importance of integrating renewable energy sources into standalone energy systems is highlighted in recent literature. Maintaining energy efficiency is challenging in designing such hybrid energy systems (HES) due to seasonal variation of renewable energy potential. This study evaluates the limitations in minimizing the losses in renewable energy generated mainly due to energy storage limitations and minimizing fuel consumption of the internal combustion generator (ICG). A standalone hybrid energy system with Solar PV (SPV), wind, battery bank and an ICG is modeled and optimized in this work. Levelized Energy Cost (LEC), Waste of Renewable Energy (WRE) and Fuel Consumption (FC) are taken as objective functions. Results highlight the importance of considering WRE as an objective function which increase the mix of energy sources that can help to increase the reliability of the system.