Today, more than 80% of energy is produced from fossil fuels that pollute the air and surrounding environments each and every day, creating global warming. Therefore it is time to think about alternative sources of energy to build a climate friendly environment. In contrast to fossil fuels, renewable energy offers alternative sources of energy which are in general pollution free, unlimited, and environmentally sustainable. This paper presents a feasibility study undertaken to investigate the prospects of solar energy for the climate similar to Australia so as to further investigate the impacts of renewable energy sources in existing and future smart power systems. The monthly average global solar radiation has been collected for twenty-one locations in Australia from the National Aeronautics and Space Administration (NASA). Hybrid Optimisation Model for Electric Renewable (HOMER), and Renewable-energy and Energy-efficient Technologies (RETScreen) computer tools were used to perform comparative analysis of solar energy with diesel and hybrid systems. Initially, total net present cost (NPC), cost of energy (COE) and the renewable fraction (RF) were measured as performances metrics to compare the performances of different systems. For better optimisation, the model has been refined with a sensitivity analysis which explores performance variations due to solar irradiation and electricity prices. Finally, a statistical analysis was conducted to select the best potential places in Australia that produce maximum solar energy.