For the suggested site in the Maldives, this research paper analyzes the possibility of a hybrid renewable microgrid that is dispatch strategy-governed in both off-grid and on-grid scenarios. The planned microgrid’s techno-environmental-economic-power-system responses have been assessed. Both the power system response study and the techno-environmental-economic study of the modelled microgrid were carried out using the software platforms DIgSILENT PowerFactory and HOMER Pro respectively. Cycle charging (CC) dispatch technique had the lowest performance for both on and off-grid modes, according to the research, with cost of energy (COE) of 0.135 and 0.213 dollars per kWh, and net present costs (NPC) of 132,906 and 147,058 dollars respectively. With an NPC of 113,137 dollars and a COE of 0.166 dollars/kWh, the generator order strategy operates optimally while in on-grid mode. On the other hand, load following operates at its finest in off-grid mode, with a COE of 0.024 dollars/kWh and a NPC of 141,448 dollars. The microgrid’s reactive power, different bus voltages and frequency responses demonstrate how the proposed system, which employs the dispatch approach, voltage Q droop, and input mode PQ controller, operates steadily. For the purpose of illustrating the importance of the research effort, a comparison section between the planned HOMER optimizer and other optimization approaches is also included. The research was done with the Maldives in mind, but it offers a general notion for setting up a microgrid anyplace in the world with comparable weather and load circumstances. The research was done with the Maldives in mind, but it offers a general notion for setting up a microgrid anyplace in the world with comparable weather and load circumstances.