A grid connected renewable energy based hybrid microgrid, incorporating solar PV, biomass generators, and Gravity Energy storage system (GESS) has been proposed in this article. This is done to provide uninterrupted energy to a hilly village of North-East India. A bi-directional energy transaction with the central grid is considered for handling uncertainties and to gain monetary benefit through energy sale. The GESS is only charged through solar PV and biomass generators, to reduce the carbon footprint. The outward energy transaction with the central grid helps in reducing the energy cost for consumers inside the microgrid. Transaction price of energy from the central grid is considered from historical data available in the website of Indian Energy Exchange Limited (IEX). For different combinations of loading pattern and GESS initial storage, the Levelized cost of energy (LCOE) is found to vary in between INR 2.71/kWh to INR 3.41/kWh, which is lower than the current Nagaland state government approved tariff of INR 3.55/kWh. Any subsidy List of Symbols and Abbreviations: G H i , hourly solar insolation data (W/m 2 ); P H L , hourly load demand (kW); P H S , hourly load served through solar PV modules (kW); BG1 H O , hourly output of biomass generator 1 (kW); BG1 Max O , maximum output of biomass generator 1 (kW); P H BG1 , hourly energy served to the load through biomass generator 1 (kW); BG2 H O , hourly output of biomass generator 2 (kW); BG2 Max O , maximum output of biomass generator 2 (kW); P H BG2 , hourly load demand served through biomass generator 2 (kW); E H GESS , current energy storage of GESS (kW); E Min GESS , minimum energy storage of GESS (kW); P H GESS , hourly generation from GESS (kW); P H Grid_buy , hourly Energy bought from grid (kW); P H Excess , excess energy generated per hour (kW); C H GESS , GESS charging energy (kW); P H Grid_sale , energy sold to grid (kW); N S PV , number of solar panels in series; N P PV , number of solar panel in parallel; P STC S , power generation from single solar panel in STC (335 W); G STC , solar irradiance at STC (1000 W/m 2 ); α, temperature coefficient of the modulus (0.043% / o C); T c , PV panel cell temperature ( C); T STC c , PV panel cell temperature at STC (25 C); T air amb , ambient air temperature; G NOCT , solar irradiance at NOCT (800 W/m 2 ); NOCT, nominal operating cell temperature (45.5 C); η BG , biomass conversion efficiency (21%); M BM , total biomass available for power generation (Ton/yr); C BM , calorific value of biomass (4700 kcal/kg); H BG , operating hour of biomass generator (12 Hr); D T , underground vertical tunnel of depth of GESS; H SW , height of the suspended weight of GESS (m); d SW , diameter of the suspended weight (m); V SW , volume of suspended weight (m 3 ); ρ SW , density of the material of the suspended weight (kg/m 3 ); η GESS , roundtrip efficiency of GESS; F M , force exerted by the DC motor (N); T m , motor torque; P m SS , steady state power of motor (watt); A Wire , cross-sectional area of wire (m 2 ); σ wire , te...