ERROR Error binary size: Error: ESP does not have enough space to store OTA file. Please try flashing a minimal firmware (remove everything except ota)
It is great chance that ESP8266 is equipped with 1M flash. So change board definition in yaml from
board: esp01 # or board: esp8285
to
board: esp01_1m
or for 4M to
board: d1_mini
esphome: ... wifi: ... esp8266: board: ... ota:
debug: sensor: - platform: template name: Flash Real Size lambda: |- return ESP.getFlashChipRealSize(); update_interval: 10s