A low-cost and high-efficiency hydrogen sensor can greatly promote the development of the hydrogen economy. It has been demonstrated that the light scattering induced by volume expansion of Pd film during hydrogenation can enable fast and high-contrast optical hydrogen sensing. Here, we present an optical hydrogen alarm system based on light scattering on a Pd film during hydrogenation. Two fibers are used to connect the sensing chip with the LED and photodiode in the alarm system, which separates the explosive detection area from the electronics and thus avoid the potential risk of spark induced by electric current. The sensing chip consists of a Pd/PMMA bilayer on a PDMS substrate with a micropillar array on the surface. This forms a partially suspended Pd/PMMA bilayer, which can reduce the constraint from the substrate on Pd film and improve the response rate. We optimize the structural parameters of the sensing chip and reduce the response time <italic xmlns:mml="http://www.w3.org/1998/Math/MathML" xmlns:xlink="http://www.w3.org/1999/xlink">t</i> <sub xmlns:mml="http://www.w3.org/1998/Math/MathML" xmlns:xlink="http://www.w3.org/1999/xlink">90</sub> to about 2.2 s with a high reflectance contrast of about 960% at 650-nm wavelength when exposed to 4% H <sub xmlns:mml="http://www.w3.org/1998/Math/MathML" xmlns:xlink="http://www.w3.org/1999/xlink">2</sub> mixed with air. Such a large optical response can reduce the requirements of the detection equipment and save cost. Meanwhile, the sensor exhibits high recyclability and hydrogen selectivity in the air, which shows great potential for practical hydrogen alarm applications.