The availability of freshwater and energy is a serious issue in remote and islanded areas, especially at a small scale, where there may not be the possibility to access the grid and/or water distribution systems. In this context, polygeneration systems operating on the basis of local, renewable energy sources can be an answer to the users’ demand for electricity, heating, cooling, and domestic hot water. The scope of the proposed paper was to investigate, numerically, the energy and economic feasibility of a novel hybrid polygeneration system powered by biomass, solar, and wind energy for a micro-district of households. The proposed system consists of a biomass-fueled steam cycle, wind turbine, photovoltaic field coupled with thermal and electrical energy storage, adsorption chiller, and a reverse osmosis water desalination unit. The system is also assisted by an LPG generator set running as backup. The system provides space heating and cooling, electrical energy, and fresh and domestic hot water to 10 households located on Pantelleria Island, Italy. The proposed system is modelled and simulated through TRNSYS software with realistic user demand. The energy and economic performance of the proposed system are assessed with respect to a reference system in different scenarios, taking into account islanded operation, connection to the grid, and biomass tariffs. The results show that the proposed system achieves an excellent primary energy saving performance in all the investigated scenarios, with savings of more than 94% for all the investigated scenarios. Excluding any kind of funding, in case of new investment for the system, the simple payback oscillates between 7 and 12 years, showing that the developed alternative is fairly valid with respect to traditional solutions.