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A limited amount of fossil fuel is not a sustainable solution for growing energy demand. Developing countries like Bangladesh face major challenges in meeting the energy demand of the countries that are being increasing day to day. This work aims to design and optimize a sustainable and cost-effective hybrid energy system for a rural area in Bangladesh. Available meteorological data was collected from the NASA Prediction of Worldwide Energy Resource (Power) database. The study area (24°26.6'N, 88°20.0'E) had an average wind speed of 4.28 m/s annually and solar irradiation of 4.88 kWh/m2/day annually. Design and optimization of the system were done using HOMER pro software in terms of COE and NPC. Three different configurations were analyzed to compare the COE and NPC. Results showed that the NPC and COE for the proposed system is much lower (0.238$/kWh and $349,681) than the other two configurations, such as, PV/Wind (0.302/kWh and $442,907) and PV/Diesel (0.295$/kWh and $432,699). The main purpose of the proposed design is to supply maximum load demand using renewable energy sources with the least electricity cost. The optimized system can mitigate 88.7% load demand using renewable sources, and this reduces the CO2 emission by 89.17%. [ABSTRACT FROM AUTHOR]