During the last decade, there has been an increased interest to develop renewable energy technologies that could contribute to ever-increasing energy needs. This paper proposes a new PV array-wind-diesel generator hybrid system model to determine the optimal configuration of power systems relevant to different regions in Yemen, Sana’a and Aden. Various renewable and nonrenewable energy sources, energy storage and their applicability in terms of cost and performance are discussed. The collected data for the wind, solar radiation and diesel price were obtained from Civil Aviation & Meteorology Authority in Yemen. The Sensitivity analysis was carried out using Homer program. The results show that wind-diesel-battery model is the most suitable solution for both regions in term of the economic performance.