Increased concern about energy crisis and environmental issues has revitalized interest in the application of renewable energy technologies. For ensuring steady and continuous electricity generations, a hybrid power system (HPS) including more than one renewable energy elements is introduced. In this paper, environmental and economic analyses are used to discuss the sustainability of a HPS. An investigation is made on small-scale operations of 100kWh per day HPS as a grid-assisted power generation consisting of solar (photovoltaic) and wind energy. A comparison is drawn among the different configurations of a grid-connected HPS operation focusing on environmental and economic impacts. Emissions and the renewable energy generation fraction (RF) of total energy consumption are calculated as the main environmental indicator. Costs including net present cost (NPC) and cost of energy (COE) are calculated for economic evaluation. To simulate long-term continuous implementation of the HPS, the hourly mean global solar radiation and wind speed data of 2007, from Alice Spring (23.70 S, 133.88 E) of Australia, are used as an example of a typical hot arid climate. The monthly solar exposure between 13.31 and 21.3 2 MJ/m2/day and mean wind speed of 7.13 m/s in 2007 is considered for simulation The Micropower Optimization Model software HOMER developed by the National Renewable Energy Laboratory, USA is used for simulation. It is found that, for Alice Spring arid climates, the optimum results of HPS show a 64.3% reduction of emissions including CO2, SO2, and NOx. Renewable fraction of the optimized system is 54%. It is also found that the HPS has benefits of cost saving. The reduced NPC and COE are only equal to about 85.3% of energy consumption from standard grid. In addition, through a set of sensitivity analysis, it is found that the wind speed has more effects on the environmental and economic performance of a HPS under the specific climate.