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Palestine has a large number of remote small communities with no electricity services and the probability of connecting them with local grid in the near future is very poor, because of political and financial issues. This paper will illustrate the techno- economic impact of electrification small communities using micro-grid photovoltaic systems, and also the CO2 emission that will be reduced in comparative of using diesel generator which pollutes the environment. The implementation of two micro-grid PV-systems for electrification of two communities in Palestine will cover the electricity needs of households and street lighting, and can replace candles, kerosene and traditional unsustainable biomass and diesel generators. Beside economic and social benefits, micro-grid PV systems also have positive impacts on people’s health and on the environment due to the reduction of smoke and toxic waste. [ABSTRACT FROM AUTHOR]