Prerequisite

Install the ESP8266 Arduino development environment from esp8266 Arduino. The software is supported with Arduino IDE versions 1.6.10 until 1.8.1 and esp8266 Arduino stable version 2.3.0.

• I prefer a standalone version of the IDE allowing easy ESP8266 file manipulation. This can be achieved by downloading the Arduino IDE ZIP file for non admin install. After unzipping and before executing arduino.exe add an empty directory called portable
• Follow the procedure from the ESP8266 Arduino README.md to install the development environment using the Arduino IDE Board Manager
• Copy the sonoff directory to your sketchfolder

Download and unzip the pubsubclient MQTT library into directory portable\sketchbook\libraries and rename to pubsubclient. Update default value in file pubsubclient\src\PubSubClient.h

• Change MQTT_MAX_PACKET_SIZE from 128 to at least 400

Optionally install php and a local web server (ie apache) for OTA and copy directory api in webroot.

"Over The Air" updates

If you want to be able to upload the OTA file from the IDE to your web server perform the following changes to the Arduino IDE environment:

• Copy file espupload.py to directory portable\packages\esp8266\hardware\esp8266\2.3.0\tools and change HOST_ADDR to refer to your web server
• Replace files boards.txt and platform.txt in directory portable\packages\esp8266\hardware\esp8266\2.3.0

This will provide an additional option Tools - Upload Using: OTA_upload.