In remote locations such as villages, islands and hilly areas, there is a possibility of frequent power failures, voltage drops or power fluctuations due to grid-side faults. Grid-connected renewable energy systems or micro-grid systems are preferable for such remote locations to meet the local critical load requirements during grid-side failures. In renewable energy systems, solar photovoltaic (PV) power systems are accessible and hybrid PV-battery systems or energy storage systems (ESS) are more capable of providing uninterruptible power to the local critical loads during grid-side faults. This energy storage system also improves the system dynamics during power fluctuations. In present work, a PV-battery hybrid system with DC-side coupling is considered, and a power balancing control (PBC) is proposed to transfer the power to grid/load and the battery. In this system, a solar power conditioning system (PCS) acts as an interface across PV source, battery and the load/central grid. With the proposed PBC technique, the system can operate in following operational modes: (a) PCS can be able to work in grid-connected mode during regular operation; (b) PCS can be able to charge the batteries and (c) PCS can be able to operate in standalone mode during grid side faults and deliver power to the local loads. The proposed controls are explained, and the system response during transient and steady-state conditions is described. With the help of controller-in-loop simulation results, the proposed power balancing controls are validated, for both off-grid and on-grid conditions.