This study aimed to find a distributed renewable power system with hydrogen generation and storage to meet the current Isle of Rum's energy demands. Five different systems (Case 2-6) were evaluated compared to the current power system (Case 1), with the inclusion of a hydrogen generation and storage subsystem acting as an energy storage medium in Case 3, 4, 5 and 6. Case 2 exhibited a 96.2% reduction in diesel consumption. Case 3 and 4 achieved a fully renewable generation mix through the addition of a hydrogen subsystem comprised of a 28 kW PEM electrolyser, 120 kg compressed storage and modified gen-set. Case 5 and 6 also achieved a fully renewable generation mix, meeting the domestic heating and full heating demands of the island respectively through the integration of heat pumps. Economic analysis showed that Case 2 exhibited the lowest cost, with a LCOE of 3.02 pound/kWh, a 43% reduction from Case 1. Both Case 3 and Case 4 also had a lower LCOE than Case 1 of 5.02 pound/ kWh and 4.37 pound/kWh respectively. This shows that the hydrogen subsystem designed can be an economically viable option despite its currently high CAPEX. Both Case 5 and 6 had the highest CAPEX of all systems, due to the additional generation technology required to meet the additional heating demand. However, they achieved the lowest LCOE at 1.86 pound/kWh and 0.76 pound/kWh, due to the high efficiency exhibited by the heat pumps used for the heating load.