Summary
Nowadays the whole world is striving to achieve energy security and sustainable development through sustainable utilization of cleaner energy resources. But due to the rapidly rising population caused by the unprecedented urban development, it has created imbalances of energy supply and demand. Hybrid energy systems have emerged as a promising source to augment existing energy infrastructure for sustainable energy supply and to reduce the impact of challenges posed by the energy scarcities. There have been continuous requests from the urban sector for additional energy resources, but the energy generation involves a complex phenomenon. In India also, there are abundances of rising energy demands from various sectors over the regions, and these demands cannot be fulfilled further due to the limitations of the energy generation grids. As a result, an approach is required to offer additional energy resources beyond the use of diesel generator (which increases environmental pollution). Recently due advancement in hybrid energy systems consisting of non‐renewable & renewable or renewable & renewable or non‐renewable & non‐renewable, it provides a scope to understand the various configuration of the hybrid energy system for past trends, present status and future scenarios. The investment in energy technologies is critical to be evaluated with techno‐economic feasibility analysis for resource efficiency optimization. Hence, the main objective of this work is to propose an optimal system configuration for urban residential standalone hybrid energy systems to fulfil the electrical energy requirement, which is technically and economically reliable & feasible. The current work accounts for scaling up the existing energy system with proper implementation. The simulations results show that expected average energy requirements of 5 kWh/day with a peak of 818 W for a typical household can be met with proposed configuration (with components like solar PV, wind turbine, power generator [diesel] and battery backup system). The data simulation and optimization technique for a monthly profile of wind, solar, and excess energy generation over HOMER simulation toolkit offer the potential to generate excess electricity of 19.3%. Techno‐economic assessment of the system shows that the proposed system offers more economical and performance benefits. This study also articulates the need to propose a better energy system structure with basic energy grid extension as a cost‐effective solution for sustainable development. Similar kind of assessment will offer a useful decision support system for tropical countries to guide future researchers in energy studies.