This paper scrutinizes the techno-economic feasibility of a solar hybrid off-grid power system, in a rural area in Tunisia. Hybrid Optimization of Multiple Energy Resources (homer) is used for the design and the optimization of a hybrid photovoltaic (PV)/diesel power system consisting of photovoltaic panels, a diesel generator, a converter, and a battery bank. A sensitivity analysis is carried out to investigate the impact of the key system parameters such as the average load, the diesel fuel price, and the reliability constraints on the system outputs and performance. Sensitivity analysis is also used to compare different system configurations and to identify thresholds and situations in which one configuration is more cost-effective than another. Three system types are considered: PV/battery, PV/diesel/battery, and diesel/battery. The results showed that beyond a certain load threshold, the hybrid system is the most cost-effective and that micro-grid projects based on hybrid PV/Diesel power systems can be a solution for rural electrification in Tunisia where there is no possibilities for the national electric grid extension.