In this paper, Economic Analysis and Optimization of Micro Grid (MG) considering Incentive oriented Demand Response Programme (DRP) is proposed. To minimize levelized cost of energy, net present value and to maximize return on investment, incentive oriented Demand Response Programme is implemented using Hybrid optimization model of electric renewables (HOMER). Assessment of this work targets end users having installed net energy meters/smart meters with flat rate. This DRP also encourage end users to reduce their peak load. Simulations are carried by Hybrid optimization model of electric renewables. Results show that MG with incentive oriented DRP can be utilized for optimizing the bidding, utility savings to minimize levelized cost of energy, net present value and maximize Return on Investment(ROI).