Battery energy storage system (BESS) can effectively mitigate the uncertainty of variable renewable generation. Degradation is un-preventable for batteries such as the most popular Lithium-ion battery (LiB). The main causes of LiB degradation are loss of Li-ions, loss of electrolyte, and increase of internal resistance which are hard to model and predict. In this paper, we propose a data driven method to predict the battery degradation per a given scheduled battery operational profile. Particularly, a neural net-work based battery degradation (NNBD) model is proposed to quantify the battery degradation with inputs of major battery degradation factors. When incorporating the proposed NNBD model into microgrid day-ahead scheduling (MDS), we can estab-lish a battery degradation based MDS (BDMDS) model that can consider the equivalent battery degradation cost precisely. Since the proposed NNBD model is highly non-linear and non-convex, BDMDS would be very hard to solve. To address this issue, a neural network and optimization decoupled heuristic (NNODH) algorithm is proposed in this paper to effectively solve this neural network embedded optimization problem. Simulation results demonstrate that the proposed NNODH algorithm is able to ob-tain the optimal solution with lowest total cost including normal operation cost and battery degradation cost.