A simulation model for modeling photovoltaic (PV) system power generation and performance prediction is described in this paper. First, a comprehensive literature review of simulation models for PV devices and determination methods was conducted. The well-known five-parameter model was selected for the present study, and solved using a novel combination technique which integrated an algebraic simultaneous calculation of the parameters at standard test conditions (STC) with an analytical determination of the parameters under real operating conditions. In addition, the simulation performance of the model was compared with other models, and further validated by outdoor tests, which indicate that the proposed model fits well the entire set of experimental field test I–V curves of the PV module, especially at the characteristic points. After validation, this model was employed to predict the PV system power output under real conditions. The results show that the predictions agree very well with the PV plant field collected data. Thus, the operating performance of a standalone PV system located on a remote island in Hong Kong has been further evaluated with the aid of this model. It is found that the PV array power output is restricted by the status of the battery bank. This research demonstrates that the PV simulation model developed during the study is simple, but very helpful to PV system engineers in understanding the I–V curves and for accurately predicting PV system power production under outdoor conditions.