The optimization of diesel generators (DGs) and renewable energy sources have to be done within a cost benefit, high reliability and environmentally friendly framework. Most of optimization method just consider only from economical point of view. This paper presents complete optimization method involving of cost, reliability and pollutant emission into optimization process. The reliability level is analyzed using basic probabilistic concept in order to find loss of load probability (LOLP). This value is then used to determine the customer damage cost due to electricity interruption. Meanwhile, CO2 emission as an indicator of pollution is calculated to determine the annual emission cost (AEC). By considering both reliability level and CO2 emission, the optimization results do not just show economic merit but will satisfy both of reliability level and environmental issue.