Fast depleting fossil fuels and the growing awareness for environmental protection have led us to the energy crisis. Hence, efforts are being made by researchers to investigate new ways to extract energy from renewable sources. ‘Microgrids’ with Distributed Generators (DG) are being implemented with renewable energy systems. Optimization methods justify the cost of investment of a microgrid by enabling economic and reliable utilization of the resources. This paper strives to bring to light the concept of Hybrid Renewable Energy Systems (HRES) and state of art application of optimization tools and techniques to microgrids, integrating renewable energies. With an extensive literature survey on HRES, a framework of diverse objectives has been outlined for which optimization approaches were applied to empower the microgrid. A review of modelling and applications of renewable energy generation and storage sources is also presented.