Utility grid outages can be tackled by the recently advocated micro-grid concepts, which is envisaged to escalate the use of regionally available renewable energy sources. The objective of this paper is capacity optimization of RES in a practical 5 bus micro-grid considering different operating conditions of both load and sources. The micro-grid consisting of wind turbine, solar panel, hydro and battery and HOMER software is used for the optimization process. The micro-grid considered is located in a rural feeder at Amrita University, were load shedding are commonly occurring for prolonged periods. This optimization process considers the load shedding periods and actual load profile of the University so as to arrive the best optimized capacity to independently work even under grid outages. A peak demand of 1 MW along with the predefined architecture of the micro-grid is fed as input to HOMER along with the load shedding periods. The optimization results are subjected to sensitivity analyses in order to account for wind speed and solar irradiance variations to finally result best optimized capacities for the RES present in the micro-grid.