Electrical energy and power demand will experience exponential increase with the rise of the global population. Power demand is predictable and can be estimated based on population and available historical data. However, renewable energy sources (RES) are intermittent, unpredictable, and environment-dependent. Interestingly, microgrids are becoming smarter but require adequate and an appropriate energy storage system (ESS) to support their smooth and optimal operation. The deep discharge caused by the charging–discharging operation of the ESS affects its state of health, depth of discharge (DOD), and life cycle, and inadvertently reduces its lifetime. Additionally, these parameters of the ESS are directly affected by the varying demand and intermittency of RES. This study presents an assessment of battery energy storage in wind-penetrated microgrids considering the DOD of the ESS. The study investigates two scenarios: a standalone microgrid, and a grid-connected microgrid. The problem is formulated based on the operation cost of the microgrid considering the DOD and the lifetime of the battery. The optimization problem is solved using non-linear programming. The scheduled operation cost of the microgrid, the daily scheduling cost of ESS, the power dispatch by distributed generators, and the DOD of the battery storage at any point in time are reported. Performance analysis showed that a power loss probability of less than 10% is achievable in all scenarios, demonstrating the effectiveness of the study.