Abstract-The country of Iraq has been struggling for the past couple of decades with electricity problems like inability to supply the demand which leads to continuous power outages. This problem could be dangerous on many levels and especially in critical applications where uninterruptable power supply is necessary like hospitals and military bases. The only solution presented is the use of electrical generators. Even though electrical generators are a reliable sources of energy, they seem to have many disadvantages like their reliability on fossil fuel (diesel in particular) and the Green House Gas (GHG) emissions which causes many health issues especially in populated areas where there are to designated areas to place these electrical generators. This health and safety hazard that costs a lot of money and gives little amount of electricity is not a cost-effective solution on the long term; where more maintenance and replacement is required. This paper presents a cost-effective solution by using a hybrid photovoltaic-diesel generator system, which can be used by the civilians and the government to lower the electricity demand and reduce GHG emissions. A hybrid system is proposed for Al-Sadder city to meet the electrical demands with initial costs, net present costs and energy costs are 39 M$, 1.11 M$ and 0.526 $/kWh, respectively. These costs show great promise in this research area and perhaps more developed microsystems in the future could be the real solution to Iraq's electricity problems.