Vehicle-to-Grid (V2G) service has a potential to improve the reliability and stability of the electrical grid due to the ability of providing bi-directional power flow from/to the grid. However, frequent charging/discharging may impact the battery lifetime. This paper presents the analysis of battery degradation in three scenarios. In the first scenario, different battery capacities are considered. In the second scenario, the battery degradation with various depth of discharge (DOD) are studied. In the third scenario, the capacity loss due to different charging regime are compared. The charging/discharging of plug-in electric vehicles (PEVs) are simulated in a single-phase microgrid system integrated with a photovoltaics (PV) farm, an energy storage system (ESS), and ten electric vehicle service equipment (EVSE). The battery degradation model is an energy throughput model, which is developed based on the Arrhenius equation and a power law relationship between time and capacity fading. The simulation results show that V2G service potentially increases the PEV battery degradation. With the same DOD, higher battery capacity can increase the degradation degree. For a specific PEV battery, the higher DOD, higher temperature, and more frequent discharging accelerate the battery degradation to some extent.