Answer to questions, such as: 'What is the per unit cost of generation from a microgrid/renewable energy source?', 'Can renewable energy generation attain grid parity?', have largely remained unanswered. Approach towards renewable sources is mostly driven by environmental concerns rather than economy. In this paper we initiate a first step towards answering these questions and provide analysis of microgrid economy through optimal design approach. A framework for decision support system for sizing of distributed generators is provided. The objective function formulation involves costs (installation, maintenance and operational), economic factors (inflation and interest rate) as well as uncertainties (in the renewable generation and load demand). A few case studies involving a small manufacturing unit and a commercial load give some interesting insights into economy of microgrid and renewable generation sources. A detailed discussion on results obtained from these case studies are presented here. © 2016 IEEE.