Reducing power fluctuations is essential for controlling the integration impacts of wave energy converter (WEC) plants in both distribution and transmission grids, and in stand-alone isolated power systems. This paper presents an analysis on the cost of and how a battery storage system can be used to further reduce the variation of power generated from the WEC due to the fluctuating nature of waves and its impact to the grid. The electrical power output from WEC-Sim simulations for the six sea states used in the Wave Energy Prize was analyzed to compute the peak power and power time history. The results were used to evaluate the battery storage capacity that is needed for a WEC system to provide reasonable power flow to the grid and estimate its cost based on the latest cost information for battery technologies published by the U.S. Energy Information Administration. Finally, a preliminary grid integration analysis was performed to demonstrate how WEC-generated power would contribute to a small island electricity system. As shown in the study, the instantaneous peak power is the primary cost driver for the battery storage and the power take-off system, and reducing the power fluctuations is essential for reducing the overall levelized cost of energy (LCOE). The power flow variation from WECs can be significantly reduced using battery storage without adding significant overall system costs, and the implementation of battery storage is essential for grid integration applications. There may also be additional opportunities to further investigate energy storage technologies that are specific to WEC applications to reduce these costs even further.