A pilot region was selected and cost analysis of using renewable energy sources with a hydrogen system for that region's energy demand is introduced, in a techno-economic perspective, in this paper. The renewable energy potential for the region was evaluated by implementing energy cost analysis. The study also evaluates the feasibility of utilizing solar and wind energy with hydrogen as a storage unit to meet the electricity requirements of the pilot region as a standalone system and in conjunction with the conventional grid based electricity. In order to simulate the operation of the system and to calculate the technical and economic parameters, micropower optimization program Homer (NREL, US) was used in this study. Homer requires some input values, such as technological options, cost of components, and resource compliance; and then the program ranges the feasible system configurations according to the net present cost (system cost) by using these inputs. The pilot region in this study, where the renewable based energy will be used, is determined to be Electrics & Electronics Faculty, Istanbul Technical University. (C) 2010 Elsevier Ltd. All rights reserved.