Hybrid energy systems (HESs) consisting of both conventional and renewable energy sources can help to drastically reduce fossil fuel utilization and greenhouse gas emissions. The optimal design of HESs requires a suitable control strategy to realize the design, technical, economic, and environmental objectives. The aim of this study is to investigate the optimum design of a grid-connected PV/battery HES that can address the load requirements of a residential house in Iraq. The MATLAB Link in the HOMER software was used to develop a new dispatch strategy that predicts the upcoming solar production and electricity demand. A comparison of the modified strategy with the default strategies, including load following and cycle charging in HOMER, is carried out by considering the techno-economic and environmental perspectives. According to optimization studies, the modified strategy results in the best performance with the least net present cost (USD 33,747), unmet load (87 kWh/year), grid purchases (6188 kWh/year), and CO2 emission (3913 kg/year). Finally, the sensitivity analysis was performed on various critical parameters, which are found to affect the optimum results on different scales. Taking into consideration the recent advocacy efforts aimed at achieving the sustainable development targets, the models proposed in this paper can be used for a similar system design and operation planning that allow a shift to more efficient dispatch strategies of HESs.