A model-based system and method for analyzing power source performance and optimizing operational costs are provided. Data from the power source (such as a battery) and/or a device associated with the power source is analyzed and processed to predict an operating life of the power source. This could allow, for example, a power source replacement schedule to be generated for the device. If the analysis indicates that abnormal conditions exist or that any user-defined alerts are warranted, a message could also be sent to an operator terminal. The system and method may continue to monitor the device and thus provide real-time data. The data may also be stored in memory, collected over time, and analyzed or used in various ways. The system and method thus provide a cost effective and reliable analysis of power source performance and any associated operational and replacement costs.