Industrial sector is of great significance for economic growth of every country, but industries are polluting our environment day by day. Most of the customers at industrial and commercial level use Diesel Generator (DiG) as a reliable alternative source of electrical power when grid supply is unavailable. The use of DiG during loading shedding hours would increase Cost of Energy (COE) per KWh and also enhance the environmental emissions. With the distinct emphasis on the implementation of an industrial microgrid in Faisalabad, Pakistan has been specified in this paper. The prospective benefits of the microgrid fall into three major kinds: cost reduction, fuel saving, and improved environmental emissions. The optimization objective of this work is to maximize these benefits. This study contributes to the on-going studies about hybrid microgrid system for industrial loads and draws the attention towards clean form of energy to reduce the environmental emissions and energy saving. Different cases are studied; microgrid sizing, techno-economic exploration and environmental effects are addressed using (Hybrid Optimization Model for Electric Renewables) HOMER. The results show that COE and environmental emissions have been significantly reduced for the proposed system.