Integrated hybrid power systems have become more and more important in recent years. The functioning of medium-temperature proton-conducting solid oxide fuel cell (pSOFC) hybrid system is proposed in this work. The combined system consists of a pSOFC stack, steam methane reformer, compressors, burners, heat exchangers and methanol synthesizing reactor. The excess waste heat of the burner is recovered using heat exchangers. Also, the unutilized hydrogen from SOFC is used for carbon reduction by methanol production. The functioning of configured system is explored by using Matlab/Simulink/Thermolib software. In pSOFC operation, stoichiometric ratio (Sto) of air is maintained 3 and Sto of hydrogen is varied between 1.4 to1.7. Results show that the benefit of carbon reduction depends on methanol production. By using water separator, the methanol production efficiency increases dramatically. In addition, hydrogen transfer membrane is used to increase stack efficiency and control the temperature of stack chamber and reformer. This further improves benefit of carbon reduction. The proposed hybrid system in this work can be used to power huge residential buildings and some factories.