This paper presents the optimization of stand-alone and grid-connected hybrid power generation systems for green islands, with application to Koh Samui in southern Thailand. A techno-economic optimization analysis is applied using the Hybrid Optimization Model for Electric Renewable (HOMER) Pro simulation tool. Four scenarios are identified to select the most suitable solution for a hybrid renewable energy system (HRES) integrating solar photovoltaic (PV), wind turbine generator (WTG), fuel cell (FC), and battery energy storage (Li-Ion), with backup diesel generation or grid connection with the mainland as options. The NASA-SSE and MERRA databases are used as inputs to analyze the solar and wind energy potentials, respectively. The results show that the levelized cost of energy (LCOE) of the HRES with a grid connection to the mainland (Scenario 3) has the lowest LCOE (0.132 US$/kWh), but at large greenhouse gas (GHG) emission costs (20.5 ktonnes/year) due to the high carbon intensity of Thailand’s power portfolio. A stand-alone, 100% renewable energy system (Scenario 4) includes a PV capacity of 182 MW, a wind power capacity of 8 MW, a fuel cell system of 10 MW, a 17.9 MW power converter, and 211 MWh of battery storage. The net present cost (NPC) of this system is 542 MUS$ and the LCOE is 0.309 US$/kWh, with 89% of the energy generated by the solar PV system. Therefore, a 100% renewable energy-based microgrid system is possible on Koh Samui as it can provide a more suitable and reliable solution when considering a HRES system for the total load demand (104 MW of peak load) of the island. Finally, the economic analysis also reveals that the investment in a HRES system is feasible as the payback period is 9 years under an internal rate of return (IRR) of 10% and an appropriate Feed-in-Tariff (FiT) of 0.385 US$/kWh.