In the theoretical part of the paper – in the second and third chapters – the operating principle is described and the basic equations of the system components (photovoltaic source, batteries, transformer, PI regulator, step-up DC converter and single-phase bridge inverter) are given, along with an explanation of the concept of unipolar and bipolar PWM modulation. Simulation models of the system components created in MATLAB Simulink are also described. The selection of parameters and the corresponding system component menus are presented. The fourth chapter includes simulation analysis and comments on the obtained results, starting from a simpler system configuration to a more complex one, in order to better understand the influence of individual components and changes in the corresponding parameters on the system behavior. The simplest configuration consists of batteries, inverters and loads. Within this configuration, the adjustment of the PI voltage regulator parameters of the loads is explained and the minimum number of batteries for the linear operating range of the inverter is determined. The initial configuration was upgraded with an inductive filter, whose inductance was determined by trial and error with the aim of keeping the THD of the load voltage below 5%, for unipolar and bipolar PWM modulation. The considered system was further upgraded with an ideal transformer, in order to raise the voltage level of the inverter output voltage. The final configuration of the island photovoltaic system consists of a PV source, a step-up DC/DC converter, batteries, inverter, inductive filter, transformer and loads. After determining the settings of the reactive components of the step-up converter and adjusting the parameters of the PI voltage regulator of the PV source, the impact of changes in insolation and temperature of the PV source and load power on the system power balance (i.e., on battery charging and discharging), with a fixed PV voltage, was analyzed. Finally, the impact of the battery SOC on the system operation was analyzed