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Large electrolytic capacitors used in grid-connected and stand-alone photovoltaic (PV) applications for power decoupling purposes are unreliable because of their short lifetime. Film capacitors can be used instead of electrolytic capacitors if the energy storage requirement of the power conditioning units (PCUs) is reduced, since they offer better reliability and have a longer lifetime. Film capacitors have a lower capacitance than electrolytic capacitors, causing enormous frequency ripples on the DC-link voltage and affecting the standalone photovoltaic system’s dynamic performance. This research provided novel direct sliding mode controllers (DSMCs) for minimizing DC-link capacitor, regulating various components of the PV/BES system that assists to manage the DC-link voltage with a small capacitor. DSMCs were combined with the perturb and observe (P&O) method for DC boost converters to increase the photovoltaic system’s dynamic performance, and regulate the battery’s bidirectional converter (BDC) to overcome the DC-link voltage instabilities caused via a lower DC-link capacitor. The system is intended to power both AC and DC loads in places without grid connection. The system’s functions are divided into four modes, dependent on energy supply and demand, and the battery’s state of charge. The findings illustrate the controllers’ durability and the system’s outstanding performance. The testing was carried out on the MT real-time control platform NI PXIE-1071 utilizing Hardware-In-The-Loop experiments and MATLAB/Simulink.