An optimal unit sizing method is presented for stand-alone microgrids with practical system and component life-cycle considerations. The proposed method has been applied to the design and development of a real microgrid system on Dongfushan Island, Zhejiang Province, China, consisting of wind turbine generators, solar panels, diesel generators and battery storage units. A genetic algorithm (GA)-based method is used to solve the sizing optimization problem with multiple objectives including the minimization of life-cycle cost, the maximization of renewable energy source penetration and the minimization of pollutant emissions. The actual system configuration and the operating strategy are discussed in detail in this paper, as well as the operational experience regarding the unique microgrid issues observed and lessons learned that may be useful for future microgrid design and development.