Abstract: The increasing replacement of renewable energy for thermal power results in the decline of power grid frequency regulation capability. To solve this problem, a photovoltaic-energy storage (PV-ES) system model is established and a control strategy is proposed, which utilizes the idle capacity of the inverters to participate in peak shaving and frequency regulation. To ensure the two modes of peak shaving and frequency regulation of the energy storage battery operate coordinately, the energy storage battery is set into four types of state of charge (SOC) zones, including disable zone, frequency regulation zone, peak shaving charging zone and peak shaving discharging zone. The maximum output constraint coefficient of the energy storage battery is constructed based on SOC feedback to optimize the output and prolong the service life of the energy storage battery. Finally, a PV-ES system model is established in MATLAB/Simulink software. The simulation results and economic analysis for a typical case show that with the proposed control strategy, the PV-ES system has the ability to participate in peak shaving and frequency regulation of power grid by utilizing the idle capacity of the inverters.