A　microgrid　is　an　excellent　supplement　for　both　urban　and　rural　utility　grids.　It　assists　in　the　integration　of　different　kinds　of　renewable　and　distributed　generation　and　it　has　the　potential　to　make　the　distribution　system　more　flexible　and　reliable.　A　microgrid　is　a　combination　of　two　or　several　energy　resources　like　natural　gas,　wind,　photovoltaic,　biomass　or　diesel　generators.　Different　energy　resources　together　with　battery　storage　system　can　complement　one　another　to　provide　a　more　continuous　power　output.　Two　microgrid　prototypes　are　discussed　and,　optional　configurations　are　estimated　using　the　economic　analysis　tool　HOMER.　Economic　benefits　and　greenhouse-gas　emissions　of　microgrids　are　calculated　and　compared.　Results　show　that　microgrids　with　optimal　sizing　and　operation　can　achieve　both　cost　efficiency　and　lower　emissions.　©　(2012)　Trans　Tech　Publications,　Switzerland.