Most of rural areas in Indonesia, especially outside Java islands, are still undeveloped and lacked household electric power. On the other hand, grid extension isn't a suitable solution for them because of the general layout in Indonesia is an archipelago state and the price of grid exension is high. Therefore, we must find another solution for electricity generation which is suitable for Indonesia layout and climate and cost-effective. One of the most suitable solutions regarding that problem lies on renewable energy and in this case is solar photovoltaic (PV) electrification systems. In order to achieve electricity generation using PV that's cost effective, in this paper, we choose Laboratory-Scale Micro-grid in Power System Simulation Laboratory (PSSL), Institut Teknologi Sepuluh Nopember as a model of our project. We estimate the potential demand, identify the available resources, model the electricity generation system using the HOMER simulation. Then, HOMER will do the simulation and optimization process and we choose the best option based on the net present cost and cost of electricity generation which is based on life-cycle cost (LCC) analysis. The HOMER simulation shows that the increase of fuel cost affect the cost of net present cost (NPC). The higher the cost of diesel price, the higher the NPC is.
