In residential microgrids, an energy storage system (ESS) can mitigate the intermittence and uncertainty of renewable energy generation, which plays an important role in balancing power generation and load consumption. Distributed energy storage (DES) is a common form of ESS. However, the high investment cost and fixed energy storage capacity limit their application in residential areas. This study proposes an improved service mechanism based on an alternative form of DES, cloud energy storage (CES). The energy transaction service is added in traditional CES service mechanism to enhance the power interaction between users. In addition, the pricing scheme of CES service fee is formulated, which is calculated based on the battery life loss caused by charging/discharging behaviour during the service period. This study considers that CES can improve energy storage utilisation and meet the energy storage requirements of users at a lower cost than DES. Finally, the CES service decisions are solved by the solver LINGO, including charging/discharging power decisions and energy trading decisions of users. Simulation results show that users' electricity costs are further reduced under the improved CES model. The rationality and economic feasibility of the improved CES model are demonstrated.