In order to achieve self-sufficiency, increasing national milk production is a priority of the Algerian government. This will increase on-farm demand for electricity supplied primarily from fossil fuels, which contribute to the emissions of greenhouse gases and accelerate climate change. Hence, there is a need for promoting the use of renewable energy and low carbon technologies for the sustainable development of agriculture and to reduce environmental load. In this light, this study proposes a simple and comprehensive method to assess the feasibility and the impact of replacing the existing conventional systems with renewable energy. First, we estimate the electricity consumption of modern farms in major dairy regions. Then, we identify the optimal system for satisfying farm-related electrical energy needs. The proposed method called for generalizing a successful experience conducted in a typical farm with the same characteristics and meteorological conditions to demonstrate the benefits of renewable energy utilization. The hybrid optimization model for electric renewable (HOMER) software, developed by the U.S. National Renewable Energy Laboratory, was used to determine the optimal system configuration in terms of net present cost, carbon mitigation, and renewable fraction. Renewable system components characteristics, prices, and electricity tariffs are modeled according to the Algerian market. Detailed sensitivity analyses of solar and wind resources, economic parameters as well as farm load variation on the optimal renewable energy system configuration are performed. In addition to the feasibility study focusing on the production of on-site clean energy to satisfy the load demand, this study investigates the impact of the introduction of grid-connected green energy on the energy balance of agricultural farms and the national power grid. We found that on-farm electricity consumption varies from 330 to 566 kWh/cow/year. The simulation results helped to determine the technical feasibility and economic viability of the proposed systems. We conclude that the proposed systems could improve the reliability of the utility grid during peak load periods by generating 136 GWh/year while decreasing greenhouse gas emissions by 80 million tons. This is one of the first studies that provides a clear approach for estimating electricity demand and determining the optimal renewable energy system for Algerian dairy farms. This approach is expected to contribute to the promotion of green technologies and sustainable development of the agriculture sector.