Recently direct current (DC) microgrids have drawn more consideration because of the expanding use of direct current (DC) energy sources, energy storages, and loads in power systems. Design and analysis of a standalone solar photovoltaic (PV) system with DC microgrid has been proposed to supply power for both DC and alternating current (AC) loads. The proposed system comprises of a solar PV system with boost DC/DC converter, Incremental conductance (IncCond) maximum power point tracking (MPPT), bi-directional DC/DC converter (BDC), DC-AC inverter and batteries. The proposed bi-directional DC/DC converter (BDC) lessens the component losses and upsurges the efficiency of the complete system after many trials for its components’ selection. Additionally, the IncCond MPPT is replaced by Perturb & Observe (P&O) MPPT, and a particle swarm optimization (PSO) one. The three proposed techniques’ comparison shows the ranking of the best choice in terms of the achieved maximum power and fast—dynamic response. Furthermore, a stability analysis of the DC microgrid system is investigated with a boost converter and a bidirectional DC-DC converter with the Lyapunov function for the system has been proposed. The complete system is designed and executed in a MATLAB/SIMULINK environment and validated utilizing an OPAL real-time simulator.