Sarappo Lompo Island is an inhabited small island located within the Spermonde Archipelago, in the Makassar Strait, approximately 30 km south of Makassar City. The island currently relies on a diesel generator (PLTD) for its electricity supply, which only operates 12 hours per day due to infrastructure and fuel limitations. However, Sarappo Lompo receives a high level of solar radiation, with daily solar insolation reaching up to 6.830 kWh/m²/day and an annual average of 5.668 kWh/m²/day, based on Global Horizontal Irradiation (GHI) data. This presents solar energy as a highly promising renewable energy source for the island, especially when combined with energy storage systems such as batteries. Together, they offer the potential to establish a hybrid power system that can better meet the island's energy needs. This study aims to reduce the island’s dependency on diesel generators by harnessing its renewable energy potential, transitioning from the existing diesel-based system to a more efficient hybrid power system. The HOMER Pro software was used to simulate and analyze various hybrid configurations to identify the most economical solution. The optimal design found in this study—Model C, which includes PLTD 2 + PV + Battery + Converter—resulted in the lowest Net Present Cost (NPC) of Rp20,943,600,000.00 and a Levelized Cost of Energy (LCOE) of Rp2,143.96/kWh. Furthermore, this configuration produced annual carbon emissions of 14,655 kg CO₂, making it not only cost-effective but also environmentally friendlier. These study results provide a useful reference for implementing hybrid power systems in other small islands with similar characteristics.