AbstractIntegrating hybrid energy storage system (HESS) consisting of battery and supercapacitor provides balance over the power generation and load demand, ensuring the system's stability under transient conditions. Along with battery storage, to control its rate of charging/discharging a rate limiter (RTL) is usually employed. However, the impact of the RTL on battery storage efficiency and system performance has not been explored in the existing literature. This paper investigates the performance of a grid‐tied photovoltaic (PV) system with HESS under dynamic scenarios with different RTL values applied to the battery storage. The paper explores the simulation analysis considering transient, linear, and steady‐state conditions with varying PV generation and load demand. The simulation study shows that a lower RTL value may slow down the battery response, leading to inefficient utilization of battery storage. Alternatively, a very high RTL value will not appropriately regulate the battery current, which may lead to frequent charging and discharging and deterioration of battery life. For the proposed system, RTL with a value of 100 A/s seems appropriate, providing 1.29 Wh of energy through battery storage with an energy efficiency of 91.81% for the simulated time. The DC voltage is efficiently maintained at 400 V with a ripple factor of 0.45%.