One of the ways to increase the participation and penetration of renewable energy resources is to bring down the cost of these abundant resources for easy implementation and affordability. In this paper, a generalized reduced gradient (GRG) non‐linear optimization algorithm is implemented to solve a tri‐objective optimal design and sizing of a low‐cost hybrid mix consisting of a photovoltaic (PV) power plant, biomass power plant (BPP), and battery energy system for water pumping load applications in the University of Johannesburg, South Africa considering four different hybrids of biomass‐battery, PV‐battery, PV‐biomass, and PV‐biomass‐battery. The optimization model considers available energy and battery state of charge while minimizing least cost of energy (LCOE), carbon dioxide emission (tCO2eq), and loss of power supply probability (LPSP) including carbon tax incentive and penalty. The results when compared against particle swarm optimization (PSO) show the superiority of GRG over PSO with an optimal combination of PV‐biomass‐battery mix with optimal size of the PV power plant as 360.50 kW, the BPP 181.08 kW, and the battery size of 6,553.60 kWh giving a minimal optimal LCOE, CO2 emission and LPSP of 0.018 $/kWhr (with carbon tax), and 0.016 $/kWhr (without carbon tax), 28,067.73tCO2eq tCO2eq, and 1.7%, respectively. These values give a competitive advantage compared to the unit cost and values of CO2 emission and LPSP currently in the literature.