To meet the increasing electricity demand in the island of Indonesia, especially in areas that are lack access of electricity, it would be beneficial for these these islands to produce electricity using local potential renewable energy sources. In this study, Papua Province, the eastern region of Indonesia with 28 Districts, where 2,114 villages do not have electricity access was taken as the region of interest. We focused the study in Pelebaga District where 2,073 households were unelectrified. To generate electricity, we simulated the district to be supplied with local energy resources combining renewable energy sources (wind and solar power system) and conventional one (diesel power plant) by taking the reliability and optimal generation cost into account. Furthermore, the economic analysis of hybrid power generation were carried out to get electricity price and electricity subsidy that fit the system. We found that the lowest possible electricity price that fulfill capacity shortage limit was about 22.46 cUSD/kWh with total electricity production of 2,213 MWh. The annual electricity subsidies may be granted to the district up to Rp 5.6 billion to meet the power demand in off-grid schemes in Pelebaga District.