In recent years, the development of smart grid in China is gradually promoting, energy storage system (ESS) is one of the key technologies to support the development of smart grid, its economic benefit analysis is very important. This paper improves the life cycle cost (LCC) model of ESD first, then establishes the comprehensive benefit optimization operation strategy and capacity allocation model of ESD based on bilevel programming through analyzing the cost-benefit efficiency which generated by the energy storage device (ESD) of demand side, finally obtains optimal daily operation strategy and capacity of ESD through iteration of the upper and lower model. Simulation analysis of example is carried out by using particle swarm optimization algorithm, the result shows that the outstanding operation strategy and reasonable storage capacity can bring a certain economic benefits, and with the development of the electric market, the installation of energy storage device on the demand side will bring better economic benefits.