Performance degradation of a battery in 20 kWh energy storage system (ESS) under various operating conditions was studied. And energy saving of the ESS was also monitored by connecting with 20 kW photovoltaic (PV). PV-connected ESS saved 5~7% of energy consumption in 2013 compared to that without such system in 2012. As charge-discharge cycle increased, capacity decreased and the performance degradation was glaringly obvious after 40 cycles. And as charge and discharge rate increased, the performance degradation was more serious. After 50 charge-discharge cycles, a lot of degraded product was deposited on the surface of anode and cathode electrodes, and the cathode side was more contaminated. Therefore, in order to maintain the cell performance, it was more important to protect the degradation of the cathode side.