St. Martin’s Island is a little Island in the Bay of Bengal about 9 km far from the main land of Bangladesh. Nearly 5000 residents live there and fishing is their primary livelihood and as a tourist spot there are many lodges and rest houses. Since the Island is far away from the convenential national grid connection is almost unachievable even in future as a result of its geographical location. Locally installed diesel generator is used to provide electricity to inhabitants is established by power development board of Bangladesh but now it is not in operation. In this paper, an effort has been made to model a microgrid by means of hybrid electricity generation system for a small society of the Island. This system incorporates an arrangement of solar PV, wind turbine, storage battery, biogas and diesel generator. HOMER is software for optimization of renewable based amalgamative distributed generation systems has been used to find out the preeminent technical effective renewable based energy efficient system for 650 family units. Sensitivity analysis is also completed to perceive the impact of solar insolation, PV investment cost and wind speed and diesel fuel price on the optimum result. During peak load the convenential diesel generator is switched on after covering demand by renewable source. The results of the propose system shows that due to emphasize on renewable energy sources the greenhouse gas can be minimized and this proposed system produces 12000kg of carbon-dioxide, 32.2 kg of carbon-monoxide and 23.8 kg of sulfur dioxide per year which is comparatively less than the average produced greenhouse. This system produces carbon-dioxide emission of approximately12000kg per year whereas 700kW diesel generator produces 413kg per hour.