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This paper deals with the design of a hybrid energy system consisting of wind, photovoltaic, biomass and small/micro hydro to supply continuous power to the load. A diesel generator is added to ensure continuous power supply and to take care of intermittent nature of wind and photovoltaic. The paper reports the results of optimization of hybrid energy system model of a remote area of Jaunpur block of Uttaranchal state of India. The model has been developed with the objective of minimizing cost function based on demand and potential constraints and optimized using computer programme developed in C++. The economic analysis has resulted in the calculation of capital cost, cost of energy for different types of resources and optimized cost of hybrid energy system. To consider the fluctuation in the discharge and power generation from SHP, the EPDF has been varied from 1.0 to 0.0. The EPDF is Electric Power Delivery Factor (also called optimizing power factor) has maximum value equal tol.