Renewable energy has become the primary electrical power source in the last decade because of its capability to produce clean, inexhaustible, and increasingly competitive energy. Most importantly, they produce neither greenhouse gases, which cause climate change, nor polluting emissions. Additionally, their potential to use anywhere globally and falling costs have made renewable energy more attractive. Among various renewable energy sources (RESs), the growth of solar photovoltaic (PV) has been elevated due to the significant cost reduction, diverse application, low maintenance cost, and distributed nature as it can be installed close to the load centre. Solar PV technology has been drastically improved over the last few years and complemented by battery energy storage systems (BESSs), turning solar into a significantly more efficient source of clean energy. Hence, to facilitate the isolated areas, such as oceanic islands, remote villages, and military operations, with adequate electricity supply, the development and implementation of RESs, particularly solar PV dominated islanded microgrid (MG), has been drawing huge attention. The stability of MGs is crucial for reliable operation and maintaining the quality of power supply. However, due to distinct and inherent characteristics of islanded MGs such as size, feeder types, a high share of RESs, converter-interfaced components, low inertia and poor short-circuit power cause particular stability issues and complexities in the secure operation compared to conventional power systems. Among various stability issues, securing dynamic voltage stability (DVS) of RES dominated MGs following faults is a significant challenge owing to the low short circuit current contribution and poor ride through capability of inverter-based sources. Additionally, a high proportion of induction motor (IM) loads have made the MGs more vulnerable to short-term dynamic voltage instability. Acknowledging these issues, this research is aimed to assess the DVS of RES dominated islanded MGs and propose countermeasures to mitigate a probable dynamic voltage instability. Firstly, rigorous assessment of DVS of RES dominated islanded MGs with a high proportion of induction motor load is conducted. The impacts of various proportions of IM loads as well as different combinations of generation systems on the DVS of islanded MG are investigated. Note that various network service providers have updated their grid codes to integrate the low-voltage ride-through (LVRT) with reactive power support capability within the inverters. Therefore, the DVS of islanded MG is examined with conventional reactive power support. Finally, a new optimised reactive power support strategy is proposed to enhance the DVS of MGs.