© 2016, Central South University Press and Springer-Verlag Berlin Heidelberg. This work presents a novel coordinated control strategy of a hybrid photovoltaic/battery energy storage (PV/BES) system. Different controller operation modes are simulated considering normal, high fluctuation and emergency conditions. When the system is grid-connected, BES regulates the fluctuated power output which ensures smooth net injected power from the PV/BES system. In islanded operation, BES system is transferred to single master operation during which the frequency and voltage of the islanded microgrid are regulated at the desired level. PSCAD/EMTDC simulation validates the proposed method and obtained favorable results on power set-point tracking strategies with very small deviations of net output power compared to the power set-point. The state-of-charge regulation scheme also very effective with SOC has been regulated between 32% and 79% range.