An increase in energy demand is a consequence of the world’s population growth. Hence, more energy supply is needed to meet the demand. Fossil based energy can run out as well as cause air pollution. Consequently, this thesis investigates the feasibility of involving PVs in a grid with diesel backup generator to reduce reliance on conventional energy as well as decreasing air pollutants (CO2, SO2 and NOx) for a hospital building in Dammam. It also optimises the grid-connected PV system in terms of levelized cost of energy (LCOE), net present cost (NPC) and operating costs while verifying the effect of the grid power interruptions on the system costs. Moreover, energy sellback rates from the excess energy coming from PVs to the grid is included. HOMER Pro and MATLAB software were used to optimise both systems as HOMER Pro provided the ability to design, simulate and optimise power generation systems, and the ability to choose different type of control for any modelled systems. MATLAB was used to design a customised control strategy and linked to HOMER through MATLAB Link (ML) strategy for optimising both systems and compared it with built-in dispatch in HOMER Pro called Cycle Charging (CC). Using the project lifetime of 25 year in HOMER, the results reveal that ML strategy provides the optimum solution for the grid-connected PV system when the grid power outage occurs twice a year and with 5% sellback rate higher than the grid energy price as the LCOE is 0.05701 $/kWh, total NPC is $8,288,628.00 and annual operating costs are 156,658.00 $/year. The proposed system also results in huge reduction of all pollutants that ranges from 69.75% to 69.84%. To conclude, the results of the analysis of both systems show that the grid-connected PV system is a feasible regardless of the costly initial costs of PVs.