The demand of energy is increasing at an escalating pace and cannot be fulfilled entirely by conventional energy systems, due to their limited supplies. In addition to this they have a radical impact on the environment. In comparison to them hybrid energy systems are a suitable combination of renewable and non-renewable energy systems which keeps into account the advantages of both these systems, thus able to achieve reduction in cost of implementation and maintenance of the system, limited emission levels, improvement in reliability of the overall system etc. Designing of hybrid energy system for a locality and its implementation is an uphill task as the input parameters of the sources considered are randomly varying with time and are also independent of the load requirements. The paper encompasses review on various important sectors needed to be considered while designing and implementation of hybrid energy system; this includes configurations, criteria selection, sizing methodologies and control & energy management. This will help the designer to use suitable design constraints required while implementing hybrid energy system for grid connected or in off grid modes as per the requirement of the locality.