This paper analyzes dynamic modeling for rural HPS to address GHG emissions’ environmental impact on floods and climate change. The aim is to integrate renewable energy sources, such as solar energy, with traditional generators to mitigate emissions and enhance energy access in rural communities in Pakistan. The system is designed using a DC-DC converter, MPPT, LCL filter, and a DC-AC inverter. Utilizing software tools like PVsyst 7.4 and HOMER Pro-3.18.1, the study evaluates system sizing, energy consumption patterns, and optimization strategies tailored to site-specific data. The expected results include a reliable, environmentally friendly hybrid power system capable of providing consistent electricity to rural areas. The analysis of a connected load of 137.48 kWh/d and a peak load of 33.54 kW demonstrates the system’s promise for reliable electricity with minimal environmental impact. The estimated capital cost of USD 102,310 and energy generation at USD 0.158 per unit underscores economic feasibility. Dynamic modeling and validation using HIL examine the system’s behavior in response to variations in solar irradiance and temperature, offering insights into operational efficiency and reliability. The study concludes that the hybrid power system is scalable for rural energy access, which is a practical solution achieving a 100% renewable energy fraction, significantly contributing to emission reduction and promoting sustainable energy practices.