This paper presents a distributed battery energy storage architecture where the cells in the battery pack are decoupled from each other by connecting each cell with a lower power (smaller) DC-DC power converter. In addition to providing voltage regulation for the DC bus, these small DC-DC power converters are utilized to achieve state of charge (SOC) balancing among the cells by employing a proposed charge balancing controller that is based on energy sharing concept. As a result, no additional charge balancing circuits and controllers are needed in order to transfer charges between the cells of the battery pack. A system simulation model based on the proposed energy storage system architecture is developed in Matlab®/Simulink® in order to verify the feasibility and functionality of the proposed charge balancing controller.