As the world’s second-largest palm oil producer, Malaysia heavily depends on its extensive oil palm cultivation, which accounts for nearly 90% of the country’s lignocellulosic biomass waste. Approximately 20–22 tonnes of empty fruit bunches (EFBs) can be derived from an initial yield of 100 tonnes of fresh fruit bunches (FFBs) from oil palm trees. The average annual amount of EFBs produced in Johor is 3233 tonnes per day. Recognising that urban areas contribute significantly to anthropogenic greenhouse gas emissions, and to support Malaysia’s transition from fossil fuel-based energy to a low-carbon energy system, this research employed HOMER Pro software 3.18.3 to develop an optimal hybrid renewable energy system integrating solar and biomass (EFB) energy sources in Johor, Malaysia. The most cost-effective system (solar–biomass) consists of 4075 kW solar photovoltaics, a 2100 kW biomass gasifier, 9363 battery units and 1939 kW converters. This configuration results in a total net present cost (NPC) of USD 44,596,990 and a levelised cost of energy (LCOE) of USD 0.2364/kWh. This system satisfies the residential load demand via 6,020,427 kWh (64.7%) of solar-based and 3,286,257 kWh (35.3%) of biomass-based electricity production, with an annual surplus of 2,613,329 kWh (28.1%). The minimal percentages of unmet electric load and capacity shortage, both <0.1%, indicate that all systems can meet the power demand. In conclusion, this research provides valuable insights into the economic viability and technical feasibility of powering the Kulai district with a solar–biomass system.