Solar based DC microgrids and home-based systems have been a reliable option to solve rural electrification problems in many parts of the world. However, there is a pertaining problem of mismatch between local demand and on-site generation in such microgrids. Proposed work attempts to address this problem by developing an optimal peer-to-peer (P2P) energy sharing among the individual households in a DC microgrid. A nonlinear optimization problem is formulated that aims to minimize the power transmission loss and overall energy cost in a distribution network consisting of a number of households incorporating practical constraints (e.g., power balance and battery’s operational constraints). Three different aspects of operation viz., battery usage, power from grid and P2P sharing have been considered in order to facilitate maximum utilization of local distributed energy resources thereby, saving the energy bills for all households.