The environment for practical applications of an energy storage system (ESS) in a microgrid system is very harsh, and therefore actual operating conditions become complex and changeable. In addition, the signal of the ESS sampling process contains a great deal of system and measurement noise, the sampled current fluctuates significantly, and also has high frequency. In this case, under such conditions, it is difficult to accurately estimate the state of charge (SOC) of the batteries in the ESS by common estimation methods. Therefore, this study proposes a compound SOC estimation method based on wavelet transform. This algorithm is very suitable for microgrid systems with large current, frequent fluctuating conditions, and high noise interference. The experimental results and engineering data show that the relative error of the method is 0.5%, which is much lower than the extend Kalman filter (EKF) based on wavelet transform.