Nowadays, smart meters, sensors, and advanced electricity tariff mechanisms such as time-of-use (ToU), critical peak pricing tariff, and real time tariff enable electricity consumption optimization for residential consumers. The main scope of such mechanisms is to promote peak shaving, which leads to minimization of technical losses and avoidance (or delay) of grid onerous investments. This paper proposes a method to determine the optimum capacity of a storage device (SD) that significantly contributes to peak shaving of electricity consumption for residential consumers. Detailed modelling of diverse electric appliances' behavior and consumers' necessities is addressed in order to determine the optimum capacity of the SD. The effects of a small scale photovoltaic panel (PV) owned by residential consumers are also analyzed.