Compressed air energy storage (CAES) is one of the most promising mature electrical energy storage technologies. CAES, in combination with renewable energy generators connected to the main grid or installed at isolated loads (remote areas, for example), are a viable alternative to other energy storage technologies. Indeed, because of the advantage of fast response, high economic performance, and small environmental impacts, CAES has an extensive application prospect in renewable power generation. In the present work, the thermodynamic response of the charging and discharging cycles in the storage tank is numerically analyzed for a 2 kW small capacity CAES. The prediction of the system parameters from the thermodynamic analysis is essential in designing the tank, compressor, and expander. The energy extracted from the CAES system is being used for several applications such as power, heating, and cooling. Hence the real time challenge is to quantify the energy utilized for the various services provided by the system to maximize the output and overall efficiency. A thermodynamic study on the proposed system optimizes and compares the charging and discharging characteristics for adiabatic and isothermal compression. The system performance is evaluated using the TRNSYS V17 platform for CAES direct usage (using the heat of compression before the expansion process and cool energy from expansion before the CAES tank), advanced adiabatic - CAES (AA-CAES), CAES with solar system under various parametric conditions. All necessary design parameters are studied and the optimum values are determined using TRNSYS software. © 2017 Author(s).