<p>This paper proposes an optimized framework for simultaneous transmission and battery energy storage system expansion planning while considering battery degradation. The increasing penetration of photovoltaic (PV) systems introduces significant variability into power grids, necessitating effective solutions to manage operational challenges. While transmission expansions and battery installations individually mitigate these challenges, their combined potential is often overlooked, especially regarding the impact of battery degradation. We address this gap by formulating a two-stage optimization model. The first stage identifies maximum feasible battery and PV capacities by minimizing net load variability, while the second stage integrates battery degradation through a discretized sizing approach. This allows the nonlinear battery sizing formulation to be solved using a mixed-integer programming approach. A case study using Garver’s 6-bus network illustrates the effectiveness of the proposed method. The proposed approach is able to efficiently use the battery, resulting in 17.96 % lifetime degradation compared to a simple investment-based approach with 137.93 % lifetime degradation. This paper demonstrates that accounting for battery degradation significantly impacts optimal investment decisions. This approach ensures cost-effective grid operations amidst high renewable energy penetration.</p>