Remote areas in Australia are mostly powered by conventional diesel generators (DG). These systems face challenging tasks of increasing diesel costs, transportation of diesel over long distances, increased fuel consumption and maintenance costs associated with running the DGs in low load conditions. Furthermore, regulations by governments and lobbying by environmental activists are rising due to the atmospheric pollution and noise caused by DGs. The objective of this paper is to report the design, development and installation of a Photovoltaic (PV) diesel hybrid-power system. The design objective is to minimize costly battery energy storage by using an innovative variable speed diesel generator. Diesel fuel saving is achieved by running the DG in variable speed mode as well as managing the operation of the generator. HOMER software is used to simulate various battery and PV sizes and decide on the optimum sizes. The system has been field tested over a period of 12 months in Veterans retreat, Meentheena Cattle Station near Marble Bar, the hottest place in Australia.