A hybrid renewable energy system is a feasible solution for off-grid electrification where grid electricity is not available due to economic or technical limitations. In this study, rural electrification is performed on a small longhouse settlement, Long Moh, in Sarawak, Malaysia, with a population of 308 from 70 households. Initially, a hybrid PV/Hydro/DG/Battery system is proposed due to the abundance of solar and hydro resources in the village. There have been a lot of studies based on PV/DG/Battery systems in Malaysia but less with the inclusion of hydropower. Through simulation and optimization process, the most optimal system in terms of Net Present Cost (NPC) is found to be a hybrid Hydro/DG/Battery system which provides a total NPC of $213,694.90, cost of electricity of $0.08/kWh, and operating cost of $9,495.56/year. The most environmentally friendly system is the proposed PV/Hydro/DG/Battery system due to less fuel consumption (12,863.63 L/year) and its high renewable penetration. The standalone diesel generator (DG) system was the least economic and most polluting system. The best system overall for rural electrification at the case study location is a hybrid Hydro/DG/battery system due to its relatively low NPC and emissions output compared to a standalone DG system.