A frequency response optimization system includes a battery configured to store and discharge electric power, a power inverter configured to control an amount of the electric power stored or discharged from the battery, and a frequency response controller. The frequency response controller includes receiving a regulation signal from an incentive provider, determining statistics of the regulation signal, using the statistics of the regulation signal to generate a frequency response midpoint, and using the frequency response midpoint to determine optimal battery power setpoints for the power inverter. The power inverter is configured to use the optimal battery power setpoints to control the amount of the electric power stored or discharged from the battery.