The success or failure of the microgrid applications depends on how to apply the energy storage end (such as a battery energy storage system) to adjust the consistency between the power source end (such as solar power, ac mains, etc.) and the load end (such as air-conditioning, lighting, electrical equipment, etc.). Also, the key for achieving a successful system is to optimize the cost and performance simultaneously. The proposed next-generation retired battery energy storage system for microgrids includes safe and robust retired battery modules, high-efficiency four-quadrant power conditioners (4Q-PCS), and seamless transition control between autonomous islanding and grid-connected modes.