Li-ion batteries are playing a crucial role in the fields of renewable energy systems and electric vehicles. The reliability of these systems depends on a battery management system (BMS) which monitors the state of charge (SoC) and state of health (SoH) effectively. Knowing the SoH of a battery in advance enhances the system reliability. This article proposes an accurate online estimation of SoH of a Li-ion battery integrated in solar photovoltaic system (SPV) applications. The proposed method uses the modified coulomb counting method to estimate the SoH of a battery. The proposed SoH estimation method is simulated in MATLAB/Simulink by considering the aging factors such as temperature, charge/discharge rates and depth of discharge. Moreover, the proposed method is validated using an experimental prototype and the results are found to be satisfactory.