Renewable Energy Sources (RES) are gradually being recognized as an important alternate in supply side planning for micro grids. The objective of the present work is optimal planning, sizing and operation of a hybrid renewable energy based micro grid with the aim of minimizing the lifecycle cost. Two different case studies, diesel-only and diesel-renewable mixed configurations are planned to study. Minimizing the conventional fuel usage and therefore carbon dioxide emission will reduce by maintaining the highest level of reliable power of the micro grid. This is achieved by maximizing the utilization of RES and by minimizing the utility of conventional energy resources. Dispatching and rescheduling the conventional generators at their optimal efficiency operating pointswith the goal of reducing the dependency on the utility grid.HOMER, a hybrid optimization modeling software is used for designing and analyzing the hybrid power systems, which contains a combination of conventional generators, wind turbines, solar photovoltaic, hydropower, batteries, fuel cells and the biomass. The results are compared in terms of the economics, operational performance and environmental emission.